area handbook series 

Brazil 

a country study 



Brazil 

a country study 



Federal Research Division 
Library of Congress 
Edited by 
Rex A. Hudson 
Research Completed 
April 1997 




On the cover: A Xingu cosmological emblem with fif- 
teen stars and fifteen moons 



Fifth Edition, First Printing, 1998. 

Library of Congress Cataloging-in-Publication Data 

Brazil : a country study / Federal Research Division, Library 
of Congress ; edited by Rex A. Hudson. — 5th ed. 

p. cm. — (Area handbook series, ISSN 1057-5294) 
(DA Pam ; 550-20) 

"Supersedes the 1985 edition of Brazil : a country study, 
edited by Richard F. Nyrop." — T.p. verso. 

"Research completed April 1997." 

Includes bibliographical references (pp. 509-606) and 
index. 

ISBN 0-8444-0854-9 (hardcover : alk. paper) 
1. Brazil. I. Hudson, Rex A., 1947- . II. Library of 
Congress. Federal Research Division. III. Series. IV. 
Series: DA Pam ; 550-20. 
F2508.B846 1997 97-36500 
98l.06'4— DC21 CIP 



Headquarters, Department of the Army 
DA Pam 550-20 



For sale by the Superintendent of Documents, U.S. Government Printing Office 
Washington, D.C. 20402 



Foreword 



This volume is one in a continuing series of books prepared 
by the Federal Research Division of the Library of Congress 
under the Country Studies/Area Handbook Program spon- 
sored by the Department of the Army. The last two pages of this 
book list the other published studies. 

Most books in the series deal with a particular foreign coun- 
try, describing and analyzing its political, economic, social, and 
national security systems and institutions, and examining the 
interrelationships of those systems and the ways they are 
shaped by historical and cultural factors. Each study is written 
by a multidisciplinary team of social scientists. The authors 
seek to provide a basic understanding of the observed society, 
striving for a dynamic rather than a static portrayal. Particular 
attention is devoted to the people who make up the society, 
their origins, dominant beliefs and values, their common inter- 
ests and the issues on which they are divided, the nature and 
extent of their involvement with national institutions, and their 
attitudes toward each other and toward their social system and 
political order. 

The books represent the analysis of the authors and should 
not be construed as an expression of an official United States 
government position, policy, or decision. The authors have 
sought to adhere to accepted standards of scholarly objectivity. 
Corrections, additions, and suggestions for changes from read- 
ers will be welcomed for use in future editions. 

Robert L. Worden 
Acting Chief 

Federal Research Division 
Library of Congress 
Washington, DC 20540-4840 
E-mail: frds@loc.gov 



in 



Acknowledgments 



The book editor would like to thank the chapter authors for 
reviewing and commenting on various chapters. Their country 
expertise contributed greatly to the overall quality of the book. 
Frank D. McCann, in particular, volunteered his expertise in 
Brazilian military history in the form of five subsections for the 
National Security chapter. The book editor would also like to 
thank Professor Roberto Patricio Korzeniewicz of the Depart- 
ment of Sociology at the University of Maryland at College 
Park for contributing the discussion of gender in chapter 2, 
The Society and Its Environment. 

The authors are grateful to individuals in various agencies of 
the United States government, international organizations, pri- 
vate institutions, including nongovernmental organizations 
(NGOs) in Brazil, and Brazilian diplomatic offices who offered 
their time, special knowledge, or research facilities and materi- 
als to provide information and perspective. None of these indi- 
viduals, is, however, in any way responsible for the work or 
points of view of the authors. 

The book editor would like to thank the Rio Office of the 
Library of Congress — particularly Carmen Muricy, Senior 
Acquisitions Specialist; Pamela Howard-Reguindin, Field Direc- 
tor; and James C. Armstrong, former Field Director — for their 
bibliographical and other assistance. Thanks also go to Robert 
J. Olson, Department of the Army, for his efforts on behalf of 
the Country Studies/Area Handbook Program. 

In addition, the book editor would like to thank members of 
the Federal Research Division who contributed directly to the 
preparation of the manuscript. These include Sandra W. Med- 
itz, who reviewed all textual and graphic materials, served as 
liaison with the sponsoring agency, and provided numerous 
substantive and technical contributions; Marilyn L. Majeska, 
who managed editing and production; Andrea T. Merrill, who 
edited the tables, figures, and bibliography; and Barbara Edg- 
erton, Janie L. Gilchrist, and Izella Watson, who did the word 
processing and initial typesetting. Thanks also go to Mary Ann 
Saour, who performed the copyediting of the chapters; Cissie 
Coy, who performed the final prepublication editorial review; 
Stephen C. Cranton and Janie L. Gilchrist, who prepared the 



v 



camera-ready copy; and Sandi Schroeder, who compiled the 
index. 

David P. Cabitto provided graphics support, including 
design of the cover and chapter illustrations. He was assisted by 
the firm of Maryland Mapping and Graphics, which prepared 
the book's maps and charts based on the editor's drafts. 

The cover illustration is based on a nineteenth-century illus- 
tration from Antonio Bento, Abstrafdo na arte dos indios 
brasileiros, Rio de Janeiro: SPALA Editora, 1979. The chapter 
illustrations are based on nineteenth-century Amazon Indian 
wood-carving designs reproduced in Theodore Menten, ed., 
Amazon Indian Designs from Brazilian and Guianan Wood Carv- 
ings, New York: Dover, 1994. 

Finally, the book editor acknowledges the generosity of the 
individuals and the public, private, diplomatic, and interna- 
tional agencies — particularly the Inter-American Development 
Bank and the Office of the Military Attache of the Brazilian 
Embassy in Washington — who allowed their photographs to be 
used in this study. 



VI 



Contents 



Page 

Foreword iii 

Acknowledgments v 

Preface xv 

Table A. Selected Acronyms and Abbreviations xvii 

Table B. Chronology of Important Events xxvii 

Country Profile xxxiii 

Introduction liii 

Chapter 1. Historical Setting 1 

Frank D. McCann 

THE INDIGENOUS POPULATION 6 

THE COLONIAL ERA, 1500-1815 9 

Frontier Expansion That Shaped Brazil 9 

Early Colonization 14 

French and Dutch Incursions 21 

Gold Mining Displaces Cane Farming 23 

The Transition to Kingdom Status 32 

THE KINGDOM OF PORTUGAL AND BRAZIL, 1815-21 . . 34 

THE EMPIRE, 1822-89 s 37 

Emperor Pedro I, 1822-31 37 

The Regency Era, 1831-40 43 

The Second Empire, 1840-89 44 

THE REPUBLICAN ERA, 1889-1985 54 

The Old or First Republic, 1 889-1 930 55 

The Era of Getulio Vargas, 1930-54 67 

The Post-Vargas Republic, 1954-64 72 

The Military Republic, 1964-85 78 

Chapter 2. The Society and Its Environment 87 

Donald R. Sawyer 

THE PHYSICAL SETTING 90 



vii 



Size and Location 90 

Geology, Geomorphology, and Drainage 91 

Soils and Vegetation 95 

Climate 97 

Geographic Regions 99 

The Environment 103 

POPULATION 109 

Population Size and Distribution 109 

Mortality 110 

Fertility Ill 

Migration and Urbanization 114 

SOCIAL STRUCTURE 115 

Social Classes 115 

Gender 118 

Youth 121 

The Elderly 122 

Race and Ethnicity 122 

Amerindians 124 

Rural Groups 126 

CULTURAL UNITY AND DIVERSITY. 126 

The Brazilian Way 128 

Language 130 

Mass Communications 131 

Family and Kinship 132 

RELIGION 132 

Roman Catholicism 132 

Other Religions 134 

HEALTH STATUS AND HEALTH CARE 136 

Jaklen Muoi Tuyen 

Indicators of Health 136 

Infectious and Chronic Diseases 137 

Nutrition and Diet 139 

The Health Care System 1 39 

Health Professionals and Resources 142 

PUBLIC HEALTH AND WELFARE 1 43 

Social Security 143 

Sanitation and Public Utilities 143 

Housing 144 

EDUCATION 144 

Literacy 145 



Vlll 



Primary and Secondary Schools 146 

Colleges and Universities 147 

Principal Research Libraries 149 

SOCIAL CONFLICT AND PARTICIPATION 149 

Conflict and Nonviolence 149 

Growth of Social and Environmental Movements. . 151 

Inclusion and Exclusion 152 

Chapter 3. The Economy 157 

Charles C. Mueller and Werner Baer 

HISTORICAL BACKGROUND AND ECONOMIC 

GROWTH 160 

The Colonial Period 160 

The Economy at Independence, 1822 163 

The Coffee Economy, 1840-1930 163 

A Period of Sweeping Change, 1930-45 166 

Import-Substitution Industrialization, 1945-64. . . . 168 

Stagnation and Spectacular Growth, 1962-80 171 

Stagnation, Inflation, and Crisis, 1981-94 174 

THE LABOR FORCE AND INCOME LEVELS 1 80 

Employment and Earnings 180 

Inequality and Poverty 185 

STRUCTURE OF PRODUCTION 187 

Agriculture 187 

Livestock 190 

Fishing 191 

Industry 192 

Mining 193 

Energy , 195 

The Services Sector 201 

Donald V. Coes 

PRIVATIZATION 209 

EXCHANGE-RATE AND BALANCE OF PAYMENTS 

POLICIES 213 

Exchange Rates and Foreign Trade 214 

Capital Flows and the External Debt 217 

FISCAL AND MONETARY POLICY, THE PUBLIC 

SECTOR, AND INFLATION 221 

Fiscal Trends in the 1980s 222 

Pressures on Public-Sector Expenditures in 

the 1980s 224 

ix 



Fiscal Deficits and Inflation 227 

BRAZIL'S REAL PLAN 229 

TRADE POLICIES 233 

TRADE PATTERNS AND REGIONAL ECONOMIC 

INTEGRATION 240 

ECONOMIC OUTLOOK 248 

Chapter 4. Government and Politics 253 

David V. Fleischer 

POLITICAL CULTURE 257 

CONSTITUTIONAL FRAMEWORK 259 

STRUCTURE OF GOVERNMENT 263 

The Executive 263 

The Legislature 265 

The Judiciary 273 

State and Local Governments 277 

THE POLITICAL PARTY SYSTEM 279 

Historical Origins and Evolution 279 

Major Parties in Congress 281 

Minor Parties in Congress 287 

Regional Strength of the Parties 289 

Party Legislation 290 

POLITICS 291 

Sarney's President 1985-90 291 

Collor de Mello's Presidency, 1990-92 293 

Franco's Presidency, 1992-94 295 

Cardoso's Presidency, 1995- 296 

WOMEN IN POLITICS 298 

THE ELECTORAL SYSTEM 300 

ELECTIONS 302 

The Presidential Election of 1989 302 

Congressional and State Elections, 1990 303 

Municipal Elections, 1992 304 

General Elections, 1994 304 

Municipal Elections, 1996 307 

INTEREST GROUP POLITICS 308 

Interest Groups 308 

The Lobbying Process 310 

The Media 311 

FOREIGN RELATIONS 313 

The Foreign Service 313 



x 



Foreign Policy Decision Making 313 

Multilateral Relations 315 

Latin America 315 

Europe 316 

The Middle East 317 

Africa 319 

Asia 322 

United States 323 

Chapter 5. National Security 333 

Scott D. Tollefson 

THE MILITARY ROLE IN SOCIETY AND GOVERN- 
MENT . . . . 337 

Scott D. Tollefson and Frank D. McCann 

Early History 337 

Military Rebellion and the Revolution of 1930 341 

From Moderator to Director, 1930-85 344 

The Internal Security Mission, 1964—85 346 

Civil-Military Relations, 1985-94 350 

BRAZIL AND INTERNATIONAL CONFLICTS, 1917-95 ... 352 

FOREIGN MILITARY INFLUENCE 354 

THE MILITARY ROLE IN THE INTELLIGENCE 

SERVICES 358 

Scott D. Tollefson and Frank D. McCann 

The National Intelligence Service, 1964-90 358 

The Strategic Affairs Secretariat, 1990-94 360 

DEFENSE INDUSTRIES 363 

MISSION OF THE ARMED FORCES 366 

The Military Mission since 1988 » 366 

The Military in the Amazon 367 

The Military Role in Counter-Drug Actions 372 

Civic Action 374 

DEFENSE EXPENDITURES 375 

ORGANIZATION OF THE ARMED FORCES 377 

Command and Control 377 

Army 379 

Navy 381 

Air Force 384 

PERSONNEL AND TRAINING 385 

Scott D. Tollefson and Frank D. McCann 

Conscription 385 

xi 



Ranks, Uniforms, and Insignia 385 

Education and Training 389 

Sociology of the Officer Corps 394 

Officer Recruitment 397 

Women in the Armed Forces 399 

SECURITY FORCES 400 

Federal Police 400 

State Police 401 

CRIME AND PUNISHMENT 403 

Crime 403 

Penal Code 404 

Penal Institutions 408 

TOWARD THE FUTURE 409 

Chapter 6. Science and Technology 413 

Simon Schwartzman and 
Maria Helena Magalhdes Castro 

HISTORICAL EVOLUTION 417 

Colonial Science 417 

Imperial Science 417 

Applied Science in Agriculture and Health 418 

The Search for Alternatives 419 

Science and Technology as Modernization, 

1945-64 420 

The Great Leap Forward, 1968-79 423 

Science and Technology as a Pressure Group, 

1979-90 426 

THE COMPUTER INDUSTRY POLICY 427 

SCIENCE FOR INDUSTRIAL COMPETITIVENESS 428 

ADMINISTRATION OF SCIENCE AND TECHNOLOGY . . 430 

The Ministry of Science and Technology 430 

National Council for Scientific and Techno- 
logical Development 431 

The Funding Authority for Studies and Projects . . 433 
The Coordination of High-Level Personnel 

Training 433 

Other Activities by the Federal Government 433 

Science and Technology in the States 434 

The Sao Paulo Science and Technology System. . . 434 

RESEARCH AND DEVELOPMENT 435 

University Research and Graduate Education 436 

xii 



Research in State-Owned Corporations 437 

Technological Research in the Private Sector 438 

Centers of Excellence 439 

Policy Perspectives 441 

NUCLEAR PROGRAMS 445 

Scott D. Tollefson 

THE SPACE PROGRAM 452 

Scott D. Tollefson 

MISSILE PROGRAMS 458 

Scott D. Tollefson 

Appendix. Tables 463 

Bibliography 509 

Glossary 607 

Index 623 

Contributors 655 

List of Figures 

1 Administrative Divisions of Brazil, 1997 liv 

2 Four South American Viceroyalties, ca. 1800 30 

3 Topography and Drainage 92 

4 Geographic Regions, 1997 100 

5 Ecological Regions and National Parks, 1992 106 

6 Population Distribution by Age-Group and Sex, 

1991 112 

7 Employment by Sector, 1994 » 182 

8 Gross Domestic Product (GDP) by Sector, 1993 188 

9 Petroleum, Natural Gas, Minerals, and Hydro- 

electric Resources, 1995 194 

10 Transportation System, 1996 204 

11 Brazil's Real Exchange Rate and Government 

Intervention, 1964-92 216 

12 Structure of the Government, 1997 267 

13 Organization of the Armed Forces, 1996 378 

14 Organization of the Army, 1995 382 

15 Officer Ranks and Insignia, 1996 386 

16 Enlisted Ranks and Insignia, 1996 388 

17 Organization of Military Instruction, 1996 390 

xiii 



18 Organization of the Ministry of Science and 

Technology, 1996 432 



xiv 



Preface 



Like its predecessor, published in 1983, this study is an 
attempt to examine objectively and concisely the dominant his- 
torical, social, environmental, economic, governmental, politi- 
cal, and national security aspects of contemporary Brazil. This 
new edition also includes a chapter on science and technology. 
Sources of information included books, journals, other period- 
icals and monographs, official reports of governments and 
international organizations, and numerous interviews by the 
authors with Brazilian government officials and experts in aca- 
demia and nongovernmental organizations (NGOs) in Brazil. 

Chapter bibliographies appear at the end of the book; brief 
comments on sources recommended for further reading 
appear at the end of each chapter. To the extent possible, 
place-names follow the system adopted by the United States 
Board on Geographic Names (BGN). Measurements are given 
in the metric system; a conversion table is provided to assist 
readers unfamiliar with metric measurements (see table 1, 
Appendix). A glossary is also included. 

The body of the text reflects information available as of 
April 1997. Certain other portions of the text, however, have 
been updated. The Introduction discusses significant events 
that have occurred since the completion of research, the Coun- 
try Profile includes updated information as available, and the 
Bibliography lists recently published sources thought to be par- 
ticularly helpful to the reader. 



xv 



Table A. Selected Acronyms and Abbreviations 



Acronym or Abbreviation 



Organization or Term 



ABACC 

ABAL 

ABC 

ABDD 

ABERT 

ABI 

ABIN 

ABINEE 

ABONG 

ADESG 

AEB 
AFA 
AGU 

AIDS 
ALADI 

ALALC 

ALCSA 

AMAN 

ANC 

AP 

Arena 
Avibras 

Bacen 
Banerj 
Banespa 
BB 

BNDE 

BNDES 

BNH 



Agenda Brasileiro-Argentina de Contabilidade e Controle de 
Materials Nucleares (Brazilian-Argentine Agency for Account- 
ing and Control of Nuclear Materials) 

Associacao Brasileira de Alummio (Brazilian Aluminum Associa- 
don) 

Agencia Brasileira de Cooperacao (Brazilian Cooperadon 
Agency) 

Associacao Brasileira de Defesa da Democracia (Brazilian Associa- 
don for the Defense of Democracy) 

Associacao Brasileira das Emissoras de Radio e Televisao (Brazil- 
ian Association of Radio and Television Stations) 

Agencia Brasileira de Inteligencia (Brazilian Intelligence Agency) 

Agencia Brasileira de Inteligencia (Brazilian Intelligence Agency) 

Associacao Brasileira da Industria Eletro-Eletronica (Brazilian 
Electro-Electronic Industry Associadon) 

Associacao Brasileira de Organizacoes Nao-Governementais (Bra- 
zilian Association of Nongovernmental Organizations) 

Associacoes dos Diplomados da Escola Superior de Guerra (Asso- 
ciations of War College Graduates) 

Agencia Espacial Brasileira (Brazilian Space Agency) 

Academia da Forca Aerea (Air Force Academy) 

Advocacia-Geral da Uniao (Office of the Federal Attorney Gene- 
ral) 

acquired immune deficiency syndrome 

Associacao Latino-Americana de Integracao (Latin American 
Integradon Associadon-LAIA) 

Asociacion Latinoamericana de Libre Comercio (Latin American 
Free Trade Association-LAFTA) 

Area de Livre Comercio Sul-Americana (South American Free 
Trade Association) 

Academia Militar das Agulhas Negras (Agulhas Negras Military 
Academy) 

Assembleia Nacional Constituinte (Nadonal Constituent Assem- 
bly) 

Acao Popular (Popular Action) 

Alianca Renovadora Nacional (Nadonal Renewal Alliance) 

Avibras Industria Aeroespacial SA. (Avibras Aerospace Industry, 
Inc.) 

Banco Central do Brasil (Central Bank of Brazil) 
Banco do Estado de Rio de Janeiro (Rio de Janeiro State Bank) 
Banco do Estado de Sao Paulo (Sao Paulo State Bank) 
Banco do Brasil (Bank of Brazil) 

Banco Nacional de Desenvolvimento Economico (Nadonal Eco- 
nomic Development Bank) 

Banco Nacional de Desenvolvimento Economico e Social 
(Nadonal Bank for Economic and Social Development) 

Banco Nacional de Habitacao (Nadonal Housing Bank) 



Table A. ( Continued) Selected Acronyms and Abbreviations 



Acronym or Abbreviation 



Organization or Term 



Bope 

Bovespa 

Bradesco 

Cacex 

CAIC 

CAPES 

CBERS 

CBIA 

CBPF 

CDTN 

CEBs 

CEF 

CEI 

Cenimar 
Cenpes 

Cepel 

Cetem 

CFN 

CIA 

CIAC 

CIE 
CLA 

CMA 

CMFA 

CNAE 

CNB 
CNBB 

CNDM 

CNEN 

CNI 



Batalhao de Operacoes Especiais (Special Operations Battalion) 

Bolsa de Valores do Sao Paulo (Sao Paulo Stock Exchange) 

Banco Brasileiro de Descontos (Brazilian Discount Bank) 

Carteira de Comercio Exterior (Department of Foreign Trade) 

Centro de Atencao Integrada a Crianca (Center for Comprehen- 
sive Attention to Children) 

Fundacao Coordenacao de Aperfeicoamento de Pessoal de Nfvel 
Superior (Council for Advanced Professional Training) 

Satelite Sino-Brasileiro de RecursosTerrestres (China-Brazil Earth 
Resources Satellite) 

Centro Brasileiro de Infancia e Adolescencia (Brazilian Center of 
Infancy and Adolescence) 

Centro Brazileiro de Pesquisas Fisicas (Brazilian Center for Phys- 
ics Research) 

Centro de Desenvolvimento de Tecnologia Nuclear (Center for 
Development of Nuclear Technology) 

Comunidades Eclesiais de Base (Ecclesiastical Base Communities) 

Caixa Economica Federal (Federal Savings Bank) 

Comissao Especial de Investigacao (Special In vesdgating Commis- 
sion) 

Centro de Informacoes de Marinha (Naval Intelligence Center) 

Centro de Pesquisa e Desenvolvimento (Research and Develop- 
ment Center) 

Centro de Pesquisas de Energia Eletrica (Electric Power Research 
Center) 

Centro de Tecnologia Mineral (Mineral Technology Center) 
Corpo de Fuzileiros Navais (Marines) 

Centro de Informacoes da Aeronautica (Air Force Intelligence 
Center) 

Centro Integrado de Assistencia a Crianca (Integrated Center for 
Assistance to Children) 

Centro de Informacoes do Exercito (Army Intelligence Center) 

Centro de Lancamento de Alcantara (Alcantara Launching Cen- 
ter) 

Comando Militar da Amazonia (Amazon Region Military Com- 
mand) 

Comando Geral das Forcas Armadas (Armed Forces Joint Com- 
mand) 

Comissao Nacional de Atividades Espaciais (National Commission 
for Space Activities) 

Comando Naval de Brasilia (Brasilia Naval Command) 

Conferencia Nacional dos Bispos do Brasil (National Conference 
of Brazilian Bishops) 

Conselho Nacional de Direitos da Mulher (National Council on 

Women's Rights) 
Comissao Nacional de Energia Nuclear (National Nuclear Energy 

Commission) 

Confederacao Nacional das Industrias (National Confederation 
of Industry) 



Table A. (Continued) Selected Acronyms and Abbreviations 



Acronym or Abbreviation 



Organization or Term 



CNM 
CNPCP 

CNPq 
CNPq 

Cobae 

Cobra 

Conama 

Conasp 

Coppe 

CPA 
CPI 

CPOR 

CPqD 

CPT 
CPTEC 

CSN 

CSN 
CTA 
CTEx 
CTI 

CTTC 

CTT 

CVRD 
DAC 
DAL 
DASP 

DCET 

DEA 
Depen 



Comando Naval de Manaus (Manaus Naval Command) 

Conselho Nacional de Politica Criminal e Penitenciaria (National 
Council of Criminal and Prison Policy) 

Conselho Nacional de Pesquisas (National Research Council) 

Conselho Nacional de Desenvolvimento Cientifico e Tecnologico 
(National Council for Scientific and Technological Develop- 
ment) (original name) 

Comissao Brasileira de Atividades Espaciais (Brazilian Commis- 
sion for Space Activities) 

Computadores e Sistemas Brasileiros (Brazilian Computers and 
Systems) 

Conselho Nacional do Meio Ambiente (National Environmental 
Council) 

Conselho Nacional de Seguranca Publica (National Council of 
Public Security) 

Coordenacao dos Programas de Pos-Graduacao em Engenharia 
(Coordinating Board of Postgraduate Programs in Engineer- 
ing) 

Conselho para Politica Aduaneira (Customs Policy Council) 

Comissao Parlamentar de Inquerito (Congressional Investigating 
Committee) 

Centro de Preparacao de Oficiais da Reserva (Training Center for 
Reserve Officers) 

Centro de Pesquisa e Desenvolvimento (Research and Develop- 
ment Center) 

Comissao Pastoral da Terra (Pastoral Land Commission) 

Centro de Previsao do Tempo e Estudos Climaticos (Weather 
Forecasting and Climate Studies Center) 

Companhia Siderurgica Nacional (National Iron and Steel Com- 
pany) 

Conselho de Seguranca Nacional (National Security Council) 

Centro Tecnico Aeroespacial (Aerospace Technical Center) 

Centro Tecnologico do Exercito (Army Technology Center) 

Fundacao Centro Tecnologico para Informatica (Computer Tech- 
nology Center) 

Coordenadoria Tecnica de Intercambio Comercial (Technical 
Coordinating Office for Trade) 

Coordenadoria Tecnica de Tarifas (Technical Coordinating 
Office for Tariffs) 

Companhia Vale do Rio Doce (Rio Doce Valley Company) 

Departamento de Aviacao Civil (Civil Aviation Department) 

Diretoria de Apoio Logistico (Directorate of Logistical Support) 

Departamento Administrativo do Servico Publico (Administrative 
Department of Public Service) 

Departamento de Ciencia e Tecnologia (Department of Science 
and Technology) 

Drug Enforcement Administration (United States) 

Departamento Penitenciario Nacional (Federal Prison Depart- 
ment) 



Table A. ( Continued) Selected Acronyms and Abbreviations 



Acronym or Abbreviation 



Organization or Term 



DIAP 
DIEESE 

DOI-CODI 

DPD 

DPF 
DRS 

EC 

ECEMAR 

ECEME 

ECLAC 
ECT 

Eletrobras 

Eletropaulo 

EMA 

EMAer 

Embraer 

Embrapa 

Embratel 

Embratur 

EMFA 

EN 

Engesa 

EPC 

EPCAr 

ESA 
ESCA 

Escelsa 

ESG 
EsNI 
EsSA 

EU 



Departamento Intersindical de Assessorial Parlamentar (Interun- 
ion Parliamentary Advisory Department) 

Departamento Intersindical de Estatfstica e Estudos Socio- 

Economicos (Interunion Department for Statistics and Socio- 
economic Studies) 

Departamento de Operacoes Internas-Centro de Operacoes de 
Defesa Interna (Internal Operations Department-Internal 
Defense Operations Center) 

Diretoriade Pesquisa e Desenvolvimento (Directorate of Research 
and Development) 

Departamento de Polfcia Federal (Department of Federal Police) 

Diretoria de Radioprotecao e Seguranca Nuclear (Directorate of 
Radiation Protection and Nuclear Safety) 

European Community 

Escola de Comando e Estado-Maior da Aeronaudca (Air Force 
Command and General Staff School) 

Escola de Comando de Estado-Maior do Exercito (Army General 
Staff School) 

Economic Commission for Latin America and the Caribbean 

Empresa de Correios e Telegrafos (Postal and Telegraph Com- 
pany) 

Centrais Eletricas Brasileiras S.A (Brazilian Electric Power Com- 
pany, Inc.) 

Eletricidade de Sao Paulo SA. (Sao Paulo Power, Inc.) 

Estado-Maior da Armada (Navy General Staff) 

Estado-Maior da Aeronaudca (Air Force General Staff) 

Empresa Brasileira Aeronaudca (Brazilian Aeronautics Company) 

Empresa Brasileira de Pesquisa Agropecuaria (Brazilian Agricul- 
ture and Livestock Research Enterprise) 

Empresa Brasileira de Telecomunicacoes (Brazilian Telecommu- 
nications Company) 

Empresa Brasileira de Turismo (Brazilian Tourism Agency) 

Estado-Maior das Forcas Armadas (Armed Forces General Staff) 

Escola Naval (Naval School) 

Engenheiros Especializados S A (Specialized Engineers, Inc.) 

Escola Preparatoria de Cadetes (Cadet Preparatory School) 

Escola Preparatoria de Cadetes do Ar (Air Cadets' Preparatory 
School) 

European Space Agency 

Engenharia de Sistemas de Controle e Automacao (Automation 
and Control Systems Engineering) 

Espfrito Santo Centrais Eletricas SA. (Espirito Santo Power 
Plants, Inc.) 

Escola Superior de Guerra (War College) 

Escola Nacional de Informacoes (National Intelligence School) 

Escola de Sargentos das Armas (School for Sergeants of the Ser- 
vices) 

European Union 



XX 



Table A. (Continued) Selected Acronyms and Abbreviations 



Acronym or Abbreviation 



Organization or Term 



FAB 
FAPESP 

FBP 

FEB 

FEF 

FGTS 

FIESP 

Finep 

FIP 

FNDCT 

FNMA 

FSE 

FTA 

FTAA 

Funai 

Funatura 

Funcet 

Furnas 
GATT 
GDP 
GEAP 

GEF 

GNP 

GPI 

G-77 

GTA 

HMO 

IAE 

IAEA 

Ibama 

IBASE 
IBGE 
IBICT 
IEAv 



Forca Aerea Brasileira (Brazilian Air Force) 

Fundacao de Amparo a Pesquisa do Estado de Sao Paulo (Sao 

Paulo State Federation to Support Research) 
Frente Brasil Popular (Brazilian Popular Front) 
Forca Expedicionaria Brasileira (Brazilian Expeditionary Force) 
Fundo de Estabilizacao Fiscal (Fiscal Stabilization Fund) 
Fundo de Garantia do Tempo de Servico (Severance Pay Fund) 

Federacao das Industrias do Estado de Sao Paulo (Sao Paulo State 
Federation of Industries) 

Financiadora de Estudos e Projetos (Funding Authority for Stud- 
ies and Projects) 

Forca Interamericana de Paz (Inter-American Peace Force) 

Fundo Nacional de Desenvolvimento Ciendfico e Tecnologico 
(National Fund for Scientific and Technological Development) 

Fundo Nacional do Meio Ambiente (National Environmental 
Fund) 

Fundo Social de Emergencia (Social Emergency Fund) 

Free Trade Agreement 

Free Trade Area of the Americas 

Fundacao Nacional do Indio (National Indian Foundation) 

Fundacao Pro-Natureza (Pro-Nature Foundation) 

Fundo Estadual de Desenvolvimento Cientifico e Tecnologico 
(State Foundation for Scientific and Technological Develop- 
ment) 

Furnas Centrais Eletricas S.A (Furnas Electric Power Plants, Inc.) 
General Agreement on Tariffs and Trade 
gross domestic product 

Grupo Evangelico de Acao Polftica (Political Action Evangelical 
Group) 

Global Environment Facility 

gross national product 

general price index 

Group of Seventy-Seven 

Grupo de Trabalho Amazonico (Amazon Working Group) 
health maintenance organization 

Instituto de Atividades Espaciais (Space Activities Center) 
International Atomic Energy Agency 

Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais 
Renovaveis (Brazilian Institute for the Environment and 
Renewable Natural Resources) 

Instituto Brasileiro de Analise Social e Economica (Brazilian Insti- 
tute of Social and Economic Analysis) 

Fundacao Instituto Brasileiro de Geografia e Estadstica (Brazilian 
Institute of Geography and Statistics) 

Instituto Brasileiro de Informacao em Ciencia e Tecnologia (Bra- 
zilian Institute of Scientific and Technological Information) 

Instituto de Estudos Avancados (Institute of Advanced Studies) 



Table A. (Continued) Selected Acronyms and Abbreviations 



Acronym or Abbreviation 



Organization or Term 



IEM 

IEN 
IMF 
IMPA 

INAMPS 

In esc 

In fr aero 

INPA 

INPE 

INT 

Intelsat 
Interpol 
IPAM 

IPEA 

IPEN 

IPES 

IPRI 

IPT 

IRBr 
IRD 

ISA 
ITA 

LAFTA 

LAIA 

LIBOR 

Light 
LNA 

LNCC 

LNLS 



Instituto de Engenharia Mecanica (Institute of Mechanical Engi- 
neering) 

Instituto de Engenharia Nuclear (Nuclear Engineering Institute) 
International Monetary Fund 

Instituto de Matematica Pura e Aplicada (Institute of Pure and 
Applied Mathematics) 

Instituto Nacional de Assistencia Medica da Previdencia Social 
(National Institute for Medical Assistance and Social Security) 

Instituto de Estudos Socio-Economicos (Institute of Socioeco- 
nomic Studies) 

Empresa Brasileira de Infraestructura Aeroportuaria (Brazilian 
Airport Infrastructure Firm) 

Instituto Nacional de Pesquisas da Amazonia (National Institute 
of Amazon Research) 

Instituto Nacional de Pesquisas Espaciais (National Institute of 
Space Research) 

Instituto Nacional de Tecnologia (National Institute of Technol- 
ogy) 

International Telecommunications Satellite Organization 

International Criminal Police Organization 

Instituto de Pesquisa Ambiental da Amazonia (Environmental 
Research Institute of Amazonia) 

Instituto de Pesquisa Economica Aplicada (Applied Economic 

Research Institute) 
Instituto de Pesquisas Energeticas e Nucleares (Institute for 

Nuclear and Energy Research) 

Instituto de Pesquisas e Estudos Sociais (Institute for Research 
and Social Studies) 

Instituto das Pesquisas das Relacoes Internacionais (International 
Relations Research Institute) 

Instituto de Pesquisas Tecnologicas (Institute for Technological 
Research) 

Instituto Rio Branco (Rio Branco Institute) 

Instituto de Radioprotecao e Dosimetria (Radiation Protection 
and Dosimetry Institute) 

Instituto Socio-Ambiental (Social-Environmental Institute) 

Instituto Tecnologico de Aeronautica (Aeronautical Technology 
Institute) 

Latin American Free Trade Association 
Latin American Integration Association 
London Interbank Offered Rate 
Servicos de Eletricidade S.A (Power Services, Inc.) 
Laboratorio Nacional de Astrofisica (National Astrophysics Labo- 
ratory) 

Laboratorio Nacional de Computacao Ciendfica (National Com- 
puter Science Laboratory) 

Laboratorio Nacional de Luz Sincrotron (National Syncrotron 
Light Laboratory) 



Table A. (Continued) Selected Acronyms and Abbreviations 



Acronym or Abbreviation 



Organization or Term 



MAST 

MDB 

MECB 

MEP 
Mercosul 
MLRS 
Mobral 

MPEG 
MPLA 

MR 
MST 
MTCR 
MUP 

NAFTA 

NASA 

NDI 

NGO 

NPT 

Nuclebras 

OME 

ON 

PADCT 

PAHO 
PALOPs 

PC 
PCB 
PC doB 
PCDT 

PDC 
PDN 
PDS 
PDT 

Petrobras 

PF 

PFL 



Museu de Astronomia e Ciencias Anns (Museum of Astronomy 
and Related Sciences) 

Movimento Democratico Brasileiro (Brazilian Democratic Move- 
ment) 

Missao Espacial Completa Brasileira (Complete Brazilian Space 
Mission) 

Movimento Eleitoral do Povo (People's Electoral Movement) 
Mercado Comum do Sul (Common Market of the South) 
multiple-launch rocket system 

Movimento Brasileiro de Alfabetizacao (Brazilian Literacy Move- 
ment) 

Museu Paraense Emflio Goeldi (Emilio Goeldi Museum of Para) 

Movimento Popular de Libertacao de Angola (Popular Movement 
for the Liberation of Angola) 

Metropolitan Region 

Movimento dos Sem-Terra (Landless Movement) 
Missile Technology Control Regime 

Movimento de Unidade Progressista (Progressive Unity Move- 
ment) 

North American Free Trade Agreement 

National Aeronautics and Space Administration (United States) 
Nucleo de Direitos Indigenos (Center for Indian Rights) 
nongovernmental organization 
Nuclear Nonproliferation Treaty 

Empresas Nucleares Brasileiras S.A (Brazilian Nuclear Corpora- 
tions) 

Ordem dos Ministros Evangelicos (Order of Evangelical Minis- 
ters) 

Observatorio Nacional (National Observatory) 

Programa de Apoio ao Desenvolvimento Cientffico e Tecnologico 
(Program in Support of Scientific and Technological Develop- 
ment) 

Pan American Health Organization 

Paises Africanos de Lingua Oficial Portuguesa (Portuguese-Speak- 
ing African Countries) 

Policia Civil (Civil Police) 

Partido Comunista Brasileiro (Brazilian Communist Party) 

Partido Comunista do Brasil (Communist Party of Brazil) 

Programa de Apoio a Competividade e Difusao Tecnologica (Pro- 
gram for Competitiveness and Technological Diffusion) 

Partido Democratico Cristao (Christian Democratic Party) 

Piano de Defesa Nacional (National Defense Plan) 

Partido Democratico Social (Democratic Social Party) 

Partido Democratico Trabalhista (Democratic Labor Party) 

Petroleo Brasileiro S.A (Brazilian Petroleum Corporation) 

Policia Federal (Federal Police) 

Partido da Frente Liberal (Liberal Front Party) 



Table A. (Continued) Selected Acronyms and Abbreviations 



Acronym or Abbreviation Organization or Term 



PGR Procuradoria Geral da Republica (Office of the Solicitor General 

of the Republic) 

PICD Programa Integrado de Capacitacao de Docentes (Faculty 

Improvement Integrated Program) 

PJ Parddo dajuventude (Youth Party) 

PL Partido Liberal (Liberal Party) 

Planasa Piano Nacional de Saneamento (National Sanitation Plan) 

PM Policia Militar (Military Police) 

PMDB Partido do Movimento Democratico Brasileiro (Brazilian Demo- 

cratic Movement Party) 

PND Programa Nacional de Desestatizacao (Nadonal Privadzation Pro- 

gram) 

PNMA Piano Nacional do Meio Ambiente (National Environmental 

Plan) 

PP Partido Popular (Popular Party) 

PP Parddo Progressista (Progressive Party) 

PPB Parddo Progressista Brasileiro (Brazilian Progressive Party) 

PP-G-7 Programa Piloto para a Protecao das Florestas Tropicais do Brasil 

(Pilot Program for the Conservation of the Brazilian Rain For- 
est) 

PPR Partido Progressista Renovador (Progressive Renewal Party) 

PPS Partido Popular Socialista (Popular Socialist Party) 

PRN Partido da Reconstrucao Nacional (National Reconstrucdon 

Party) 

Prodes Programa de Avaliacao do Desflorestamento da Amazonia 

Brasileira (Brazilian Amazon Deforestadon Appraisal Pro- 
gram) 

Prona Partido da Redefinicao da Ordem Nacional (Nadonal Order 

Redefinition Party) 

PSB Partido Socialista Brasileiro (Brazilian Socialist Party) 

PSBR Public Sector Borrowing Requirement 

PSC Parddo Social Cristao (Social Chrisdan Party) 

PSD Partido Social Democratico (Social Democratic Party) 

PSDB Partido da Social Democracia Brasileira (Brazilian Social Democ- 

racy Party) 

PST Parddo Social Trabalhista (Social Workers' Party) 

PT Partido dos Trabalhadores (Workers' Party) 

PTB Partido Trabalhista Brasileiro (Brazilian Labor Party) 

PTR Parddo Trabalhista Renovador (Workers' Renewal Party) 

PUGRJ Pondficia Universidade Catolica do Rio de Janeiro (Pondfical 

Catholic University of Rio de Janeiro) 

PV Partido Verde (Green Party) 

QCO Quadro Complementar de Oficiais (Officers' Complementary 

Corps) 

Radiobras Empresa Brasileira de Radiodifusao (Brazilian Radio Broadcast- 

ing Company) 

RFFSA Rede Ferroviaria Federal SA. (Federal Railroad System, Inc.) 



xxiv 



Table A. ( Continued) Selected Acronyms and Abbreviations 



Acronym or Abbreviation 



Organization or Term 



RHAE 

RJU 
SAE 
SAF 

SBPC 

SBT 
SBTS 

SCCCMN 

SCD-1 
SCI 

SCTDE 

SEE 
SEI 
Seplan 

SEPNCD 

SFH 
Sipam 

SIPRI 

Sisnama 

Sivam 

SLC 

SMA 

SNDH 

SNI 
SPI 
SPIA 

SSP 
SSR-1 



Programa Nacional de Capacitacao de Recursos Humanos para o 
Desenvolvimento Tecnologico (National Program for Human 
Resource Training for Technological Development) 

Regime Juridico Unico (Single Judicial Regime) 

Secretaria de Assuntos Estrategicos (Strategic Affairs Secretariat) 

Secretaria de Administracao Federal (Federal Administration Sec- 
retariat) 

Sociedade Brasileira para o Progresso da Ciencia (Brazilian Soci- 
ety for Scientific Development) 

Sistema Brasileiro de Televisao (Brazilian Television System) 

Sistema Brasileiro de Comunicacao por Satelites (Brazilian Satel- 
lite Communication System) 

Sistema Comum de Contabilidade e Controle de Materials Nucle- 
ares (Common System for Accounting and Control of Nuclear 
Materials) 

Satelite de Coleta de Dados (Data-Collecting Satellite) 

Secretaria de Controle Interno (Internal Control Secretariat) 

Secretaria de Ciencia, Tecnologia e Desenvolvimento Economico 
(Secretariat for Science, Technology, and Economic Develop- 
ment) 

Secretaria Especial de Entorpecentes (Special Secretariat for 
Drugs) 

Secretaria Especial de Informatica (Special Secretariat for Infor- 
matics) 

Secretaria de Planejamento e Coordenacao da Presidencia da 
Republica (Secretariat of Planning and Coordination of the 
Presidency of the Republic or Planning Ministry) 

Secretaria Especial da Politica Nacional do Controle de Drogas 
(Special Secretariat for National Drug-Control Policy) 

Sistema Financeiro de Habitacao (Housing Finance System) 

Sistema de Vigilancia da Amazonia (Amazon Region Surveillance 
System) 

Stockholm International Peace Research Institute 

Sistema Nacional do Meio Ambiente (National System for the 
Environment) 

Sistema de Vigilancia da Amazonia (Amazon Region Surveillance 
System) 

Superintendencia de Licenciamento e Controle (Licensing and 
Control Superintendency) 

Secretaria de Coordenacao dos Assuntos do Meio Ambiente 
(Environmental Affairs Coordinating Secretariat) 

Secretaria Nacional dos Direitos Humanos (National Secretariat 
of Human Rights) 

Servico Nacional de Informacoes (National Intelligence Service) 

Servico de Protecao aos Indios (Indian Protection Service) 

Secretaria de Politica de Informatica e Automacao (Secretariat 
for Computer and Automation Policy) 

Secretaria de Seguranca Publica (Secretariat for Public Security) 

Satelite de Sensoriamento Remoto (Remote Sensing Satellite) 



XXV 



Table A. ( Continued) Selected Acronyms and Abbreviations 



Acronym or Abbreviation 


Organization or Term 


STF 


Supremo Tribunal Federal (Federal Supreme Court) 


STJ 


Superior Tribunal de Justica (Superior Court of Justice) 


STM 


Superior Tribunal Militar (Superior Military Court) 


sus 


^ictpm a TTnif<"\ H*=» ^oi'iH^ / Qi n rr] T-T^QlfVi ^retpm^ 
OliLCllld UillLU Ut 0<1LIUC ^OlliyiC liC <±i III oyaicniJ 


bWArU 


South West African People's Organization 


TCE 


Tribunal de Contas dos Estados (State Accounts Court) 


TCM 


Tribunal de Contas Municipais (Municipal Accounts Court) 


TCU 


Tribunal de Contas da Uniao (National Accounts Court) 


Telebras 


Telecomunicacoes Brasileiras S.A (Brazilian Telecommunica- 




tions, Inc.) 


TFP 


Sociedade Brasileira de Defesa daTradicao, Familia e Pro- 




priedade (Brazilian Association of Tradition, Family, and Prop- 




erty) 


TFR 


Tribunal Federal de Recursos (Federal Court of Appeals) 


TJ 


Tribunal de Justica (State Supreme Court) 


TRE 


Tribunal Regional Eleitoral (Regional Electoral Court) 


TRF 


Tribunal Regional Federal (Regional Federal Court) 


TRT 


Tribunal Regional do Trabalho (Regional Labor Court) 


TSE 


TV i Hi i n a 1 ^nn^rinr T^lfMfntval ^ ^i ln^ri^M" T^l^ffnrial {""cMirf^ 

1 1 1 OUUC11U1 XLlClLUJdl ^UUUCllul £<1CL \-\Jl £U lil 


TST 


Tribunal Superior do Trabalho (Superior Labor Court) 


UDN 


Tinier* Tipm nf~rsi fi ^Jaf-inn^l ^^JaMnnal ^^f ^ m^^^rat^^ TTnion^ 


UDR 


Uniao Democratica Ruralista (Ruralist Democratic Union) 


UFRT 


Universidade Federal do Rio de Janeiro (Federal University of Rio 




de Janeiro) 


UNCTAD 


United Nations Commission on Trade and Development 


UNDP 


United Nations Development Programme 


Unesp 


Universidade Estadual Paulista (Sao Paulo State University) 


Unicamp 


Universidade Estadual de Campinas (Campinas State University) 




TTnit , f a H ^JoMf-inc C^Vi 1 1 H rpn P"iinrl 

KJ 111 LCU i>£lllvJ113 Cll 3 A L111U 


URV 


TTniHaHp Rpal Hp Valnr (~Rpx) Valiif TTniA 


USAID 


United States Agency for International Development 


Usiminas 


Usinas Siderurgicas de Minas Gerais SA. (Minas Gerais Iron and 




Steel Mills, Inc.) 


USP 


Universidade de Sao Paulo (University of Sao Paulo) 


Varig 


Viacao Aerea Rio Grande do Sul (Rio Grande do Sul Airline) 


VLS 


Veiculo Lancador de Satelite (Satellite Launch Vehicle) 


WWF 


World Wildlife Fund 



xxvi 



Table B. Chronology of Important Events 



Period 



Description 



FIFTEENTH CENTURY 
June 7, 1494 

1500-1815 

SIXTEENTH CENTURY 
April 22, 1500 
1500-50 
1530 



1530 
1532 
1536 
1542 
1549 



1551 
1555 
1565 

1567 

1580 

SEVENTEENTH CENTURY 
1603 
1604 

1615 
1616 
1621 

1624-25 
1630 

October 28, 1637-39 

1640 

1641 
1642 
1654 



Treaty of Tordesillas divides the world between Spain and 
Portugal, giving Portugal claim to eastern portion of as yet 
undiscovered continent of South America. 

Colonial Period 



Pedro Alvares Cabral, en route to India, discovers Brazil. 
Logging of brazilwood. 

Expedition of Martim Afonso de Sousa, major captain of Bra- 
zil, to colonize and distribute land among captains 
( donatdrios) . 

Beginning of sugar era. 

Founding of first colonies at Sao Vicente and Piratininga. 

Crown divides Brazil into fifteen donatory captaincies. 

Francisco de Orellana descends the Amazon. 

King names Tome de Sousa first governor general of Brazil 
(1549-53) . De Sousa establishes his capital at Sao Salvador 
da Bahia. 

Evangelization begins with arrival of Jesuit priests. 

Bishopric of Brazil created. 

French establish colony in Guanabara Bay. 

Governor Mem de Sa founds Sao Sebastiao do Rio de Janeiro 
(Rio de Janeiro). 

Governor Mem de Sa expels French and occupies Guanabara 
Bay. 

Crown of Portugal passes to King Philip II of Spain, uniting 
Europe's two greatest empires under single ruler. 

Portuguese penetrate to Ceara. 

India Council established to oversee administration of Portu- 
guese empire. 

Portuguese take over French town of Sao Luis do Maranhao. 
Portuguese found Belem. 

States of Maranhao (embracing the crown captaincies of 
Ceara, Maranhao, and Para) and Brazil (centering on Sal- 
vador, Bahia) created. 

Dutch temporarily capture Salvador da Bahia. 

Dutch seize Recife, Pernambuco, and attempt unsuccessfully 
to conquer Northeast (Nordeste). 

Captain Pedro Teixeira explores Amazon and founds Taba- 
tinga. 

Portugal declares independence from Spain. Duke of 
Braganca takes throne as Joao rV. 

Victory of Jesuit-trained Guaram in Battle of Mborore. 

India Council renamed Overseas Council. 

Under Treaty of Taborda, Dutch withdraw from Brazil. 



xxvii 



Table B. ( Continued) Chronology of Important Events 



Period 



Description 



1680 
1693 

EIGHTEENTH CENTURY 
1705 

1708-09 
1710-14 

1720 
1727 

January 13, 1750 



1756 
1759 
1761 
1763 

1777 

February 1777 
1789 

April 21, 1792 
1798 

NINETEENTH CENTURY 
1807 

1808-21 

March 7, 1808 

1810 

1815 
1817 

1821 

April 25, 1821 
September 1821 
1822-31 
January 1822 

September 7, 1822 



Colonia do Sacramento founded by Portuguese on Rio de la 
Plata, across from Buenos Aires. 

Era of gold and diamond mining begins. 



Under Treaty of Spanish Succession, Portuguese give up 
Colonia do Sacramento. 

War of Outsiders over control of gold-mining areas. 

War of the Mascates (merchant class of Recife defeats planter 
class of Olinda). 

Governors general of Brazil renamed viceroys. 

Coffee introduced into Brazil. 

Treaty of Madrid replaces Treaty of Tordesillas, and uti pos- 
sidetis adopted to settle boundaries. Jose I (king of Portu- 
gal, 1750-77) assumes the throne in Portugal. Marques de 
Pombal assumes effective power as Jose I's secretary of 
state. 

Guarani War leads to expulsion of Jesuits. 

Pombal expelsjesuits from the empire. 

Treaty of El Pardo annuls Treaty of Madrid. 

Viceregal capital moved from Salvador, Bahia, to Rio de 
Janeiro. 

Treaty of San Ildefonso confirms Spain's possession of Banda 
Oriental (Uruguay) and Portugal's possession of Amazon 
Basin. Pombal dismissed. 

King Jose I dies. 

Minas Conspiracy (Inconfidencia Mineira), first attempt to 
establish a republic, exposed. 

"Tiradentes," Minas Conspiracy leader, is executed in Rio de 
Janeiro. 

Bahian conspiracy against Portugal exposed. 

French invade Portugal. Pedro de Alcantara de Braganca e 
Bourbon (King Joao VI) and son Pedro flee to Brazil with 
British naval escort. 

Kingdom of Portugal and Brazil 

Joao VI arrives in Rio de Janeiro. Brazil's ports open to for- 
eign trade. 

Joao VI signs treaties with Britain, giving it trade preferences 
and privileges of extraterritoriality. 

Portugal confers kingdom status on Brazil. 

Pernambuccan revolution against British regency fails but 
deepens anti-British sentiment. 

Uruguay annexed as Cisplatine Province. 

Joao VI sails for Lisbon. 

Cortes in Portugal votes to abolish Kingdom of Brazil. 
The First Empire 

Declaring Brazil independent, Pedro I forms new govern- 
ment headed by Jose Bonifacio de Andrada e Silva. 

Pedro proclaims Brazilian independence. 



Table B. ( Continued) Chronology of Important Events 



Period 



Description 



October 12, 1822 

December 1, 1822 
1824 

1825-28 

August 29, 1825 

1827 

1828 

1831-89 

April 7, 1831 

1834 

1835-37 
1835-45 

1837- 38 

1838- 41 
July 18, 1841 
1842 

1844 
1850 

1864-70 

1869 

1870 

May 13, 1888 
November 15-16, 1889 

1889-1930 
1890 

February 24, 1891 
November 1891 
1893 

November 1894 

TWENTIETH CENTURY 
August 1914 



Brazilian independence proclaimed, with Pedro as constitu- 
tional emperor. 

Pedro crowned emperor of Brazil. 

Pedro promulgates first constitution. United States recog- 
nizes Brazil. 

War with United Provinces of Rio de la Plata (Cisplatine 
War). 

Portugal recognizes Brazilian independence by signing 
treaty, and Britain follows suit. 

Britain consolidates commercial dominance of Brazil under 
Anglo-Brazilian Treaty. 

Argentina and Brazil agree to creation of Uruguay as inde- 
pendent nation. 

The Second Empire 

Pedro I abdicates in favor of five-year-old son Pedro II. A 
three-man regency assumes control, ruling in Pedro IPs 
name. 

Amendment of 1824 constitution institutes federalism (for 
six years) and one-man regency. 

Cabanagem rebellion in Para. 

War of the Farrapos (ragamuffins), also known as the Far- 
roupilha rebellion, in Santa Catarina and Rio Grande do 
Sul. 

Sabinada rebellion in Salvador, Bahia. 

Balaiada rebellion in Maranhao. 

Coronation of Pedro II (emperor, 1840-89). 

Rebellions in Minas Gerais and Sao Paulo. 

Anglo-Brazilian Treaty expires and is not renewed. 

Land Law limits land acquisition to purchase. African slave 
trade outlawed. 

War of the Triple Alliance, allying Argentina, Brazil, and 
Uruguay against Paraguay. 

Brazilian forces defeat Paraguayan dictator Francisco Solano 
Lopez and occupy Paraguay until 1878. 

Triple Alliance defeats Paraguay. 

Golden Law abolishes slavery. 

Army deposes Pedro II. Republic proclaimed. Deodoro da 
Fonseca assumes office as president. Pedro leaves the 
country. 

Old or First Republic 

Church and State separated. 

First constitution promulgated. 

Deodoro da Fonseca dissolves Congress and is ousted. 
A civil war erupts in South (Sul) . 

First civilian president, Prudente Jose de Morals Barros, takes 
office. 



Contestado rebellion in South challenges colonel-dominated 
system. 



xxix 



Table B. ( Continued) Chronology of Important Events 



Period 



Description 



October 26, 1917 
July 5, 1922 

1924-27 

1930-45 

October 3, 1930 
July 9, 1932 
July 16, 1934 

November 10, 1937 

August 22, 1942 
1944 

October 29, 1945 
1946-64 

September 18, 1946 
October 1947 
January 1951 
August 24, 1954 

January 1956-January 1961 



1960 

January 1961 
September 2, 1961 
August 1961 
1963 

March 31, 1964 
1964-85 
April 1964 

October 27, 1965 
February 6, 1966 

March 1967 

September 1, 1967 

December 13, 1968 
1975 



Brazil declares war on Germany and joins Allied powers. 

Tenente (Lieutenants') Movement begins with Copacabana 
revolt. 

Prestes Column marches through backlands but fails to 
foment popular revolution. 

Transitional Republic 

Revolts of 1930 bring Getulio Dorneles Vargas to power. 
Sao Paulo rebellion brings civil war. 

A new constitution promulgated, and Congress elects Vargas 
to presidency. 

Estado Novo (New State) established, and previously drafted 
constitution promulgated. 

Brazil declares war on Axis powers. 

Brazilian Expeditionary Force sent to Italy. First steel mill 
opens. 

Military deposes Vargas. 

1946 Republic 

A new constitution promulgated. 

Brazil breaks diplomatic relations with Soviet Union. 

Vargas assumes office as reelected president. 

Vargas commits suicide after armed forces and cabinet 
demand his resignation. 

President Juscelino Kubitschek implements new economic 
strategy combining nationalist, developmentalist emphasis 
with openness to world economic system, creating eco- 
nomic boom. 

Capital moved inland to Brasilia. 

Janio Quadros assumes presidency. 

A parliamentary system established. 

Quadros resigns presidency, replaced byjoao Goulart. 

National plebiscite ends parliamentary system and restores 

full presidential powers to Goulart. 
Armed forces depose Goulart. 
Military Republic 

Marshal Humberto de Alencar Castelo Branco, elected by 
purged Congress, assumes presidency. First Institutional 
Act passed. 

Second Insdtutional Act bans all existing political parties and 
imposes legal guidelines for new parties. 

Third Institutional Act replaces direct election of governors 
with indirect elections by state assemblies and substitutes 
presidential appointees for mayors of capital cities. 

New constitution promulgated. General Artur da Costa e 
Silva inaugurated president. 

Fourth Institutional Act gives military complete control over 
national security. 

Fifth Institutional Act gives Costa e Silva dictatorial powers. 

Brazil signs nuclear energy accord with Federal Republic of 
Germany (West Germany). 



XXX 



Table B. ( Continued) Chronology of Important Events 



Period 


Description 


1977 


Divorce legalized. 


April 1977 


Brazil renounces military alliance with United States. 


January 1979 


Decree ends Fifth Institutional Act, grants political amnesty. 


1985 


Military steps down from political power. Democracy 




restored. 


198 5 -Present 


New Republic 


1988 


"Citizen constitution" promulgated. 


March 22, 1988 


Presidential model reinstated. 


November 15 1989 


1 11 Jl VJ.il tLL UI CML1C11 Lldl dd-LlVJil JllH-C 1 JUU, 


June iyyz 


T !■ ' J XT ■ /-I r .1 T? * 1 T~\ 1 

United Nations Conference on the Environment and Devel- 


opment (UNCED), known as Earth Summit or Eco— 92, 




held in Rio de Janeiro. 


September 1992 


1 I CjlUCil L 1 CI IlaUUU VJ^JliVJl UC lVlClliJ lillUCdLllCU. 


April 21, 1993 


National plebiscite reaffirms presidential republic. 


March 9, 1994 


Congress approves constitutional reform reducing presiden- 




tial term of office to four years, making it coterminous 




with term of congressional deputies. 


July 1, 1994 


New currency, the real, introduced at parity with United 




States dollar. 


October 3, 1994 


Fernando Henrique Cardoso wins presidential election in 




first round. 


December 12, 1994 


Former president Collor acquitted of corruption. 


January 1, 1995 


Cardoso assumes office as president. 



xxxi 



Country Profile 




Country 

Official Name: Federative Republic of Brazil (Republica Fede- 
rativa do Brasil) . 

Short Name: Brazil (Brasil). 

Term for Citizen(s): Brazilian (s). 

Capital: Brasilia. 

Independence: September 7, 1822 (from Portugal). 

Geography 

Size and Location: Standard figure is 8,511,996 square 



xxxiii 



kilometers (including oceanic islands of Arquipelago de 
Fernando de Noronha, Atol das Rocas, Ilha da Trindade, Ilhas 
Martin Vaz, and Penedos de Sao Pedro e Sao Paulo). 
According to revised figure of Brazilian Institute of Geography 
and Statistics (Fundacao Instituto Brasileiro de Geografia e 
Estatistica — IBGE), which takes into account new 
measurements, total area is 8,547,403.5 square kilometers. 
Brazil occupies about 47 percent of continental area. Country 
situated between 05°16'20 M north latitude and 33°44'32" south 
latitude, and between 34°47'30" east longitude and 73 59'32" 
west longitude. Its boundaries extend 23,086 kilometers, of 
which 7,367 kilometers on Atlantic Ocean. To north, west, and 
south, Brazil shares boundaries with all South American 
countries except Chile and Ecuador. 

Standard Time: With an east-to-west territorial dimension of 
4,319 kilometers, Brazil has four time zones. In most of 
country, time is three hours earlier than Greenwich time. 
Between summer months of October and February, country 
adopts daylight savings time, setting clock forward by one hour, 
in Southeast (Sudeste), Center-West (Centro-Oeste), and 
South (Sul) regions, and in states of Bahia in Northeast 
(Nordeste) and Tocantins in North (Norte). 

Maritime Claims: Exclusive economic zone 322 kilometers 
(200 nautical miles). 

Boundary Disputes: A short section of boundary with Paraguay, 
just west of Salto das Sete Quedas (Guaira Falls) on Parana; 
and two short sections of boundary with Uruguay — Arroio 
Invernada area of Cuareim and islands at confluence of Quarai 
and Uruguai. 

Topography and Climate: Consisting of dense forest, semiarid 
scrub land, rugged hills and mountains, rolling plains, and 
long coastal strip, Brazil's landmass dominated by Amazon 
Basin and Central Highlands. Principal mountain ranges 
(Serra do Mar) parallel Atlantic coast. Climate varies from 
mostly tropical in North, where it is seldom cold, to more 
temperate in South, where it snows in some places. Also wide 
range of subtropical variations. World's largest rain forest 
located in Amazon Basin. Higher annual measurements (26°C 
to 28°C) occur in Northeast's interior and mid- and lower 
Amazon River. Lowest values (under 18°C) occur in hilly areas 
of Southeast and largest part of South. Highest absolute values, 
over 40°C, are recorded in Northeast's low interior lands; in 



xxxiv 



Southeast's depressions, valleys, and lowlands; in Center-West's 
Pantanal (Great Wetlands) and lower areas; and in South's 
central depressions and Uruguai Valley. Lowest absolute 
temperatures often show negative values in most of South, 
where frosts and snow usual. Rainy areas correspond to Para's 
coastal lands and western Amazonas, where annual rainfall 
greater than 3,000 millimeters. In Southeast on Serra do Mar 
(Sao Paulo State), recorded annual rainfall exceeds 3,500 
millimeters. Drought areas located in interior Northeast, where 
annual rainfall under 500 millimeters. Maximum precipitation 
occurs during summer-autumn in most parts of country, except 
for Roraima and north Amazonas, where rainy season occurs 
during winter because these two states are located in Northern 
Hemisphere. 

Principal Rivers: Vast, dense drainage system consisting of 
eight hydrographic basins. Amazon and Tocantins-Araguaia 
basins account for 56 percent of total drainage area. World's 
greatest fluvial island, Bananal, located in Center-West Region 
on Araguaia. With ten of world's twenty greatest rivers, Amazon 
(Amazonas) is world's largest in volume of water and one of 
world's longest (6,762 kilometers, of which 3,615 kilometers 
are in Brazil), discharging 15.5 percent of all fresh water 
flowing into oceans from rivers. Union of Parana and Iguacu in 
South, at border between Brazil, Argentina, and Paraguay, 
forms Iguacu Falls at Foz do Iguacu. 

Society 

Population: 160,960,881, according to IBGE's February 14, 
1998, count. Largest part of population lives in Southeast (63 
million). Northeast has 45 million people; South, 23.1 million; 
North, 11.1 million; and Center-West, 10.2 million. Average 
annual population growth rate: 1.4 percent (1992-98), as 
compared with 3.15 percent in 1950-55. Urbanization rate: 80 
percent (1997). Projected 169 million population in 2000 and 
200.3 million in 2020. Population density, 18.38 people per 
square kilometer (1996), although majority crowd around 
coastal cities. 

Age Structure and Aging: Although nearly half of Brazilians are 
in their mid-twenties, fraction under fourteen years of age has 
fallen from 43 percent to 34 percent, while fraction over sixty 
years of age has risen from 4 percent to 8 percent. Median age: 



xxxv 



24.3 (1995, Pan American Health Organization— PAHO/ 
World Health Organization — WHO). Pension fund assets as 
percentage of gross domestic product (GDP — see Glossary): 
10. 

Birthrate: 21.16 births per 1,000 population (1995 estimate). 
Average for 1990-95: 24.6. 

Death Rate: Eight deaths per 1,000 population (1995 
estimate). Average for 1990-95: 7.5. 

Net Migration Rate: Zero migrant(s) per 1,000 population 
(1995 estimate). 

Infant Mortality Rate: According to 1991 census, 49.7 deaths 
per 1,000 live births, as compared with 69.1 per 1,000 in 1980. 
United Nations Development Programme (UNDP) figures: 57 
per 1,000 in 1993; 59.5 per 1,000 in 1994. Rate in Northeast in 
1995: 122 deaths per 1,000 live births. 

Life Expectancy at Birth: In 1995, 67.1 years (men, 62.1; 
women, 68.9). Seniors over sixty years numbered 10.9 million 
in 1995, or 7.4 percent of the population. 

Total Fertility Rate: About 2.3 children born per woman (1995 
average estimate). Population growth curtailed sharply since 
1975 with one of world's most successful family planning 
drives. Female sterilization (tubal ligation) and birth-control 
pills most common forms of contraception: 27 percent of 
women of child-bearing age have been sterilized, and 26 
percent use birth-control pills. According to the new Family 
Planning Law of January 12, 1996, family planning is right of 
every citizen. 

Health: Public expenditures on health as percentage of GDP: 
2.5 percent (1995). Central government health expenditures 
as percentage of total central government expenditures: 6.7 
percent. Total health expenditures as percentage of GDP: 5.8 
percent. Physicians per 10,000 people: 13 (1990). Nurses per 
10,000: 3.7 (1990). Hospital beds per 1,000 people: 3.6 (1990). 
Maternal mortality rate: 141 per 100,000 live births (1994). 
Mortality rate for cancer among women: 60 percent (1995). 
Cholera cases: 49,956 (1993), as compared with 30,054 in 1992. 
Malaria cases: 577,098 (1991). Cumulative cases of acquired 
immune deficiency syndrome (AIDS) reported to PAHO/ 
WHO as of September 1997: 10,845 (fourth highest rate in 
world); total AIDS deaths: 54,813. Human immunodeficiency 



xxx vi 



virus (HIV) estimated prevalence in 1994: 550,000. 

Housing and Sanitation: Country has serious problems 
resulting from growing demand for new housing and basic 
sanitation, in part because urbanization rate has increased 
from 47.0 percent in 1960 to 78.2 percent in 1991. In 1991, 
70.7 percent of Brazilian households served by public water 
supply system, with 92.2 percent having indoor plumbing 
equipment. In urban areas, 95 percent of dwellings receive 
water and sewerage service, and 98 percent have electric power. 
Discrepancies, such as inadequate sanitation, exist between 
poor and better-off favelas. Disposal systems cover 84 percent 
of urban areas and 32 percent of rural areas. In rural areas, 
only 61 percent of dwellings have water and sewerage access, 
and only 55 percent have electricity. Roughly 70 percent of all 
Brazilian households have refrigerators. Approximately one 
installed telephone and one automobile for every ten 
Brazilians. 

Ethnic Groups: Portuguese, who began colonizing in sixteenth 
century, and various European immigrant groups — mainly 
Germans, Italians, Spanish, and Polish — constitute about 55 
percent; mixed Caucasian and African, 38 percent; African 
(brought to Brazil as slaves), about 6 percent; and others — 
Amerindian (principally Tupi and Guarani linguistic stock), 
Japanese, and other Asians and Arabs — less than 1 percent. Sao 
Paulo has largest Japanese community outside Japan, except 
for Hawaii. 

Amerindians: Indians do not have ownership of land that they 
occupy permanently. Brazil has 651 Indian reservations 
totaling 94.6 million hectares. Largest is Yanomami (Amazonas 
and Roraima states), with 9.6 million hectares and a popula- 
tion of 18,000 members. Guarani total 20,000 members. 

Language: Portuguese, official language, spoken by all but few 
isolated Amerindians, who retain their languages, and 
immigrants who have not yet acquired proficiency in 
Portuguese. There are no official regional dialects. Brazil only 
Portuguese-speaking country in South America. 

Education: Investment in education (as percentage of 
government budget): 2.7 percent (1995). Education system 
organized on three levels: primary (eight years), secondary 
(three years), and higher education. States and municipalities 
largely responsible for primary education; states control 



xxxvii 



secondary education; private institutions largely administer 
higher education, except for federal universities. School 
enrollment figures reported in last census (1990) were: 
preschool, 3.9 million in 57,614 schools; primary, 29.4 million 
in 206,817 schools; and secondary, 3.7 million in 10,928 
schools. Primary school free and compulsory for children 
between ages of seven and fourteen. Average student in 
Brazilian public school receives four hours or less of class time 
per day, although national guidelines suggest six hours per day. 
Primary and secondary schools enroll only 88 percent of 
Brazil's children. High drop-out rates and grade repetition 
endemic problems. Only about a third of students enrolled in 
primary school finish eight-year "mandatory" schooling. 
Estimated 5 million children and 25 percent of poorest 
children do not attend school. Of sixty-eight major universities 
in Brazil, thirty-five are federal, twenty private or church- 
related, two municipal, and eleven state-supported. Nearly all 
states and Federal District have one or more federal 
universities, all of which operate directly under Ministry of 
Education. In many states, there are also one or more state 
universities and one or more Catholic universities. About 800 
other colleges and institutions of higher education grant 
degrees in areas such as engineering, medicine, agriculture, 
law, economics, and business administration. Three military 
academies train officers of Brazilian Army (Exercito 
Brasileiro), Brazilian Navy (Marinha do Brasil), and Brazilian 
Air Force (Forca Aerea Brasileira — FAB), granting diplomas 
equivalent to a B.A. degree. Only army and FAB schools of 
engineering grant graduate and postgraduate degrees. 

Literacy: Of total number of Brazilians over fifteen years of age 
(100.7 million), 81 percent literate; 19 percent illiterate (1991 
census), as compared with a 25.9 percent illiteracy rate in 1970. 
By 2000 illiteracy will be estimated 16 percent. 

Religion: Official statistics: Roman Catholic, 70 percent; 
Protestant, 19.2 percent; other, 10.8 percent. Affiliations not 
necessarily mutually exclusive. Practice of folk religions and 
Afro-Brazilian cults based on animist beliefs and slave and 
Indian traditions — such as umbanda and candomble — 
widespread among all ethnic groups. Also significant trend in 
evangelism among Catholic and Protestant groups, particularly 
in Sao Paulo area. Mormon Church of Latter-Day Saints and 
Jehovah's Witnesses active in Brazil as well. Important Jewish 
communities in states of Sao Paulo and Rio Grande do Sul, 



xxxviii 



especially in respective capital cities of Sao Paulo and Porto 
Alegre, as well as in Rio de Janeiro. 

Economy 

Gross Domestic Product (GDP): Economist Intelligence Unit 
(EIU) estimated US$775 billion for 1997, as compared with 
US$387 billion for 1992. EIU's estimated GDP real growth rate 
for 1997, 3.7 percent; and 1998, 4.0 percent. Of 1995 GDP of 
US$717 billion, 47.3 percent generated by trade and services, 
42.0 percent by industry, and 10.7 percent by agriculture. 

Per Capita GDP and Minimum Wage: Per capita GDP US$5,128 
(1997). GDP per capita average annual growth rate, 0.8 per- 
cent (1985-94). Minimum wage as of June 1995: US$108.46, or 
just over R$100 a month (for value of real — see Glossary), as 
compared with US$68.93, or R$70 a month, in July 1994, 
amounting to an actual increase of only 10 percent because of 
inflation. Minimum wage raised by 12 percent in May 1996. 

Inflation: Inflation reached 50 percent per month by June 1994 
and averaged 31.2 percent a month in 1994, for total of 2,294.0 
percent that year. As result of Real Plan, declined to monthly 
rates of between 1 and 3 percent in 1995, for an annual rate of 
25.9 percent. In 1996: 16.5 percent; 1997: 7.2 percent. 

Employment and Unemployment: Estimated labor force in 
1997: 65.5 million. Services sector employed 66 percent of 
women and 42 percent of men; industry, 14 percent of women 
and 23 percent of men; business, 15 percent of women and 15 
percent of men; civil construction, 11 percent of men; other 
activities, 5 percent of women and 9 percent of men. Men held 
61 percent of total jobs. Women's wages averaged 62 percent of 
those of men but declined to 54 percent in services sector. 
Recorded unemployment rate (includes only people actively 
looking for work and over age fifteen) in 1997: 5.5 percent. 

Agriculture: One of world's leading exporters of agricultural 
products. Grain production in 1996: 73 million tons. 
According to estimates of Food and Agriculture Organization 
(FAO) of United Nations, Brazil produced 79.4 million tons of 
grains (record crop) in 1995, as compared with 56.1 million 
tons in 1990. Center-West and South and Rondonia account for 
90 percent of crops. In 1995, 81.6 million tons of crops har- 
vested, but producers saw their income reduced by about 
US$10.4 billion, or 26 percent, owing to price decreases. 



xxxix 



Country has 46.5 million hectares under cultivation, 174.1 
million hectares in grazing lands, and 140.6 million hectares in 
arable land. Crop year runs from June to May. From 1982 to 
1992, total cultivated area fell by 30 percent, but production of 
certain grains, in tons per hectare, increased by 14.9 percent. 
Agricultural sector employed 29.4 percent of labor force in 
1992. It accounted for 10.7 percent of GDP in 1996. It accounts 
for almost 40 percent of exports. Except for wheat, Brazil 
largely self-sufficient in food. Each farmer feeds 3.6 city 
dwellers, whereas 2.5 farmers were needed to feed each city 
dweller in 1940. Brazil is world's largest exporter of coffee, 
orange juice concentrate, and tobacco, and second largest 
exporter of sugar and soybeans. In addition to sugar, Brazil 
produces a large quantity of ethanol (mainly used as fuel) from 
crushed sugarcane. Other important crops: manioc, corn, and 
rice. In addition to oranges, principal fruits are lemons, 
mangoes, guavas, passion fruit, and tangerines. 

Industry: Capital goods (see Glossary) production increased in 
1970s with creation of new companies and large capital 
investments in transportation, communications, and energy 
infrastructure. New technologically sophisticated industries 
begun in that decade included weapons, aircraft, and 
computer manufacturing and nuclear power production. 
Industrial growth slowed by economic crisis of 1980s. After start 
of RealFlan, industrial production increased vigorously by 7.5 
percent from 1993 to 1994. Manufacturing accounted for 62 
percent of exports in 1996. Industrial growth in 1997 was 3.9 
percent. 

Energy: 94 percent of current energy capacity hydroelectric. 
Electricity consumption expanded by 7.6 percent in 1995 
(versus 4.2 percent for GDP) and by 5.7 percent in first half of 

1996 (versus projected GDP growth rate of 3 percent). A dozen 
hydroelectric and thermal plants being privatized because 
electricity demand expected to outstrip supply by 1999, and 
state unable to pay off energy-sector debts. A blackout in April 

1997 affecting 20 million people expected to become an 
increasingly common occurrence. Predominance of highland 
rivers presents great potential for hydroelectric power pro- 
duction. Hydropower generating potential: 106,500 to 129,046 
megawatts /year, of which 24.4 percent in operation or under 
construction, 35.8 percent inventoried, and 39.8 percent esti- 
mated (1994 estimate). In 1992, of 233,682 gigawatt-hours 
generated, 217,782 hydroelectric, 14,454 thermal, and 1,446 



xl 



nuclear. Nuclear power generation in early 1998 was still 
negligible. About 60 percent of energy supply derived from 
renewable sources, such as hydroelectricity and ethanol. 
National oil production surpassed a record 840,000 barrels per 
day (bpd) in 1997. Petroleum imports in 1995: 760,000 bpd 
(442,000 bpd crude; 318,000 bpd derivatives). Brazil relies on 
natural gas for only 2 percent of energy needs. Produced more 
than 17 million cubic meters of natural gas per day in early 
1990s. 

Services: In 1994 services accounted for approximately 43.6 
percent of work force. 

Trade Balance: Total trade in 1997: US$109.4 billion, com- 
pared with US$77.3 billion in 1994. In ten years, 1985-95, 
foreign trade of Brazil accounted for US$521.8 billion, with 
surplus of US$129.3 billion. Foreign trade deficit in 1997: 
US$10.9 billion. 

Imports: Totaled US$60.1 billion in 1997, as compared with 
US$20.5 billion in 1993. Average import duties dropped to 14 
percent from 51 percent since 1988. Major suppliers in 1996: 
United States, 22.2 percent; Germany, 9.0 percent; Argentina, 
12.7 percent; and Japan, 5.2 percent. Half of Brazil's imports of 
manufactured goods come from United States. Brazil only 
other major Latin American country besides Chile to import 
oil, which in 1996 cost an estimated US$6.4 billion. 

Exports: Totaled US$49.2 billion in 1997, as compared with 
US$39.6 billion in 1993. Brazil's strengthened currency has 
made its exports less competitive. Brazil exports large part of 
world's production of tin, iron, manganese, and steel. Also one 
of world's largest exporters of food, mainly sugar, coffee, 
cocoa, soybeans, and orange juice. Major markets in 1996: 
United States, 19.5 percent; Argentina, 10.8 percent; Japan, 6.4 
percent; and the Netherlands, 7.4 percent. 

Tariffs: Average tariff rate: 14.0 percent; tariff ceiling: 70 
percent on automobiles (imposed in mid-1995). 

Reserves: International reserves in first quarter of 1998: US$63 
billion. 

Budget Deficit: Current account deficit in 1997: US$32.3 
billion. EIU's current account deficit estimate for 1998: 
US$33.6 billion. 

Internal Debt: Total debt of public sector (federal, state, and 



xli 



municipal governments): US$77 billion (1994). Totaled record 
US$213 billion (36.8 percent of GDP) in 1995, according to 
official figures, or US$267 billion (46 percent of GDP), if some 
unregistered existing debts included. IBGE calculated total 
domestic debt to be R$304.8 billion in September 1995, or 60.9 
percent of estimated 1995 GNP. Public Sector Borrowing 
Requirement reached 5.6 percent of GDP in 1996, as 
compared with 5.1 percent in 1995. 

External Debt: US$1 77.6 billion (public and private) in 1997; 
US$193.2 billion estimated by EIU for 1998. Total debt service: 
US$15 billion (1996). Debt-service ratio: 58.7 percent (1997). 

Official Exchange Rate: On July 1, 1994, new currency, the real 
(pi., reais), introduced. As of January 31, 1996, government 
widened to 7.07 percent range within which value vis-a-vis 
United States dollar may vary. Exchange rate on April 13, 1998: 
R$1.140=US$1. 

Foreign Investment: US$52 billion in 1996, US$38 billion in 
1995, and US$25 billion in 1994. 

Fiscal Year: Calendar year. 

Fiscal Policy: Stabilization program in 1994-96 developed 
originally by Fernando Henrique Cardoso (president, 1995- ) 
as minister of finance (May 1993 to April 1994). End of 
inflation in 1994 quickly increased demand and spending 
power of poorer Brazilians especially. Government 
endeavoring to dampen inflationary pressures. In order to 
consolidate stabilization program and put Brazil on path to 
long-term sustainable growth, government must implement 
wide-ranging structural reforms. Restrictive monetary policy 
has kept interest rates high and reduced aggregate demand 
and inflation, while improving trade balance. Fiscal position 
deteriorated considerably in 1995. Expansion of internal 
public debt a major threat to government's control over fiscal 
and monetary policy. Monetary policy somewhat more flexible 
since August 1995 because of lower level of economic activity, 
declining inflation rate, and abundance of foreign capital to 
finance current account. 

Transportation and Communications 

Roads: Since 1970s government has given funding priority to 
roads and highways. Sao Paulo, Rio de Janeiro, and other 



xlii 



major cities have modern metropolitan expressways. Practically 
all state capitals linked by paved roads. Brazilian highways of 
modern design. Road network most developed, but 
maintenance remains problem. Highway transportation of 
passengers and freight leading form of transportation in Brazil, 
with highway system 1,670,148 kilometers in length (increase 
of more than 300 percent since 1970s), of which 161,503 
kilometers paved. At least three-fourths of Brazil's population 
and goods transported by highway. Although Brazil borders all 
but two South American countries, only in southern regions 
are links to adjoining countries adequate; in North and Center- 
West, roads to adjoining countries barely passable or only 
planned. Large areas remain inaccessible. In part because of 
general disregard of traffic laws, automobile collisions claim 
lives of roughly 50,000 Brazilians per year, and drivers 
responsible for accidents rarely held accountable. New Transit 
Code took effect in January 1998, imposing a tough new set of 
traffic laws. 

Railroads: Rail network, in proportion to highways, relatively 
small. Rail lines cover only 30,129 kilometers, of which 2,150 
kilometers electrified. However, some special projects have 
been implemented, such as Steel Railroad (Ferrovia do Aco) to 
connect inland iron ore mining areas to steel mills and port 
facilities on Southeast's coast. Its western network sold to a 
foreign consortium in early 1996. Federal Railroad System, Inc. 
(Rede Ferroviaria Federal S.A. — RFFSA) has operated 73 
percent of Brazil's suburban railroads, with 21,951 kilometers 
of track and 40,500 employees in nineteen states. In 1995 
RFFSA hauled 85 million tons of cargo, and Southeastern 
Railroad Line accounted for 45 million tons. Central-eastern 
network 7,132 kilometers; western network 1,620 kilometers. 
Privatization of financially troubled RFFSA began in 1995. 

Subways: Recife, Rio de Janeiro, and Sao Paulo have new urban 
subway systems. Although Sao Paulo needs a 200-kilometer 
network, it had only forty-three kilometers in 1996. Same 
US$0.60 fare takes one anywhere on Sao Paulo's Metro 
network. New South Line of Rio de Janeiro's Metro extends to 
Copacabana. 

Ports: Thirty-six deep-water ports. Most, including Rio de 
Janeiro and Santos (largest in Latin America), being privatized. 

Waterways: Some 50,000 kilometers navigable. Boats main 
form of transportation in many parts of Amazon Basin. 



xliii 



Amazon navigable by ocean steamers as far as 3,680 kilometers 
to Iquitos, Peru. Constitutional amendment ending state 
monopoly of domestic shipping approved August 15, 1995. 
Until regulations approved, foreign ships may carrv onlv 

passengers. 

Pipelines: Approximately 2,000 kilometers for crude oil, 465 
kilometers for refined products, and 257 kilometers for natural 
gas. Planned Bolivia-Brazil gas pipeline targeted for 
completion in 1997; will be 3,415 kilometers in length, running 
from Santa Cruz, Bolivia, to Sao Paulo. Pipeline will also con- 
nect to states of Rio de Janeiro and Minas Gerais and link with 
existing refineries and production fields in Sao Paulo's Campos 
and Santos basins. 

Air Transport and Airports: Vast netw T ork of air services in 
existence since 1930s. Direct air connections to all other 
countries in South America, several in Central America, and all 
three in North America, as well as to every continent. Routes — 
both at commuter and medium- to long-range level — operated 
by various commercial airlines, increasingly using airplanes 
designed and built in Brazil. All airlines registered in Brazil are 
private enterprises, some allowing foreign-equity participation. 
Major airlines include Rio Grande do Sul Airline (Viacao Aerea 
Rio Grande do Sul — Varig) and Sao Paulo Airline (Viacao 
Aerea Sao Paulo — VASP). Ten fully operational international 
airports. 

Radio: Number of radios — about 30 million (1995). Number 
of radio stations: at least 2,751; 334 being installed. Range of 
radio stations: national/regional, 2,932; tropical (in tropical 
areas), eighty-two; shortwave, 151; and FM, 1,248. Estimated 
audience: 100 million. Government has ultimate control over 
radio stations through power to control licensing. Government 
broadcasts domestically for hour each night by requisitioning 
time on all national radio stations. Radio Nacional 
(government's overseas radio service) transmits information 
and cultural programs supportive of Brazilian foreign policy 
and commercial activity to Europe, the Americas, xAfrica, and 
parts of Asia. Station's medium-wave and short-wave broadcasts 
in Portuguese to the Amazon Region. Brazilian Radio 
Broadcasting Company (Empresa Brasileira de Radiodifusao — 
Radiobras) became Brasilia-based Brazilian Communications 
Company (Empresa Brasileira de Comunicacoes S.A. — 



xliv 



Radiobras) in 198,8. Radiobras directs programming. 

Television: Number of televisions increased by only 200,000 
from 1985 to 1995, when total figure reached 26.2 million. 
Estimated potential audience: 80 million. TV programming 
run primarily by private enterprises. Licenses to operate issued 
by executive branch through Ministry of Communications and 
approved by Congress. Number of television stations, at least 
257 and thirty-one under installation; commercial TV stations, 
269; educational and university TV stations, twenty (owned by 
federal government, state governments, universities, and 
educational foundations). TV networks: Globo Television 
Network (Rede Globo de Televisao), eighty-one stations; Rede 
Bandeirantes, sixty-three stations; Brazilian Television System 
(Sistema Brasileiro de Televisao — SBT), seventy-seven stations; 
Rede Manchete, thirty-six stations; TV Record, twelve stations. 
Domestic dissemination of signals beamed by all five national 
networks through two domestic Brasilsat satellites operated by 
Brazilian Telecommunications Company (Empresa Brasileira 
de Telecomunicacoes — Embratel), government's national 
communications corporation. Embratel also operates micro- 
wave system available to all stations. Various "cable" systems are 
also being developed in major Brazilian cities. Rather than 
actually transmitting by physical cable, these systems work via 
satellite to individual receiving dishes installed for subscribers. 
NET System, being installed in major cities, operates by cable. 
Every major television market in Brazil has five networks 
represented by affiliate station. Much of television program- 
ming entertainment, especially famous telenovelas (prime-time 
soap-opera-style dramas). Most cities also have educational TV 
channel, TV Educativa, which carries cultural, documentary, 
and sometimes foreign language programs. 

Telephones: Number of telephones 13,237,852 (1995, IBGE). 
About half of telephones and one-third of installed cellular 
phone lines in Sao Paulo. Residents of Sao Paulo and Rio de 
Janeiro must pay about US$3,000 to obtain telephone line. 
Nine lines per 100 population. About 98 percent of rural 
properties have no telephone lines. Government plans to triple 
number of fixed phone lines to 40 million by 2003 and to 
increase number of cellular links from 800,000 to 8.2 million 
by 1999. In July 1996, Brazilian legislators formulating plans to 
privatize state-owned monopoly of Brazilian Telecommunica- 
tions (Telecomunicacoes Brasileiras S.A. — Telebras), which has 
90 percent of Brazilian telephone subscribers and twenty-seven 



xlv 



regional companies. Telebras launched three cable systems but 
was facing stiff competition in cable market from publishing 
giants Grupo Abril (TVA Brasil) and Globo (Globocabo and 
NET Brasil). Sales of telecommunications products in 1995 
accounted for US$2.1 billion. In 1997 Brazil had 7,600 kilo- 
meters of fiber optic cable; additional 7,400 kilometers sched- 
uled for completion in 1999. 

Telecommunications Organizations: Two main telecommu- 
nications organizations are National Department of Telecom- 
munications (Departamento Nacional de Telecomunicacoes — 
Dentel), located within Ministry of Communications in 
Brasilia; and Brazilian Association of Radio and Television 
Stations (Associacao Brasileira de Emissoras de Radio e 
Televisao — ABERT), also located in Brasilia. Dentel supervises 
television and radio broadcasting. 

Print Media: 333 newspapers published daily in Brazil in 1993. 
All newspapers privately owned and operated. Total daily 
circulation varies between 2.2 and 2.6 million. Leading 
newspapers: Folha de Sao Paulo (Sao Paulo; liberal, center-left; 
daily circulation 540,000 copies; Sunday circulation 1,200,000); 
O Globo (Rio de Janeiro; conservative; 280,000, daily; 525,000, 
Sunday); Estado de Sao Paulo (Sao Paulo; independent; 
320,000, daily; 650,000, Sunday); Jornal do Brasil (Rio de 
Janeiro; Catholic, conservative; 116,000, daily; 160,000, 
Sunday); weekday Gazeta Mercantil (Sao Paulo; business; 
100,000, daily); Correio Braziliense (Brasilia; 50,000, daily; 
100,000, Sunday); Jornal de Brasilia (Brasilia; 22,000, daily; 
26,000, Sunday). Periodicals: Of several hundred periodicals 
published in Brazil, most influential and widely circulated news 
and current affairs magazines are: Veja (1,207,521), Visao, and 
IstoE (491,752). Leading business news biweekly is Exdme 
(188,000). Leading illustrated general interest magazine is 
Manchete (130,000). All but Rio de Janeiro-based Manchete 
published in Sao Paulo. Domestic news agencies: Rio de 
Janeiro-based Agenda Globo and Agenda JB; Brasilia-based 
Agenda ANDA and Empresa Brasileira de Noticias; and Sao 
Paulo-based Agenda Estado and Agenda Folha. 

Government and Politics 

Administrative Subdivisions: Composed of 5,581 municipalities 
(1997) and 9,274 districts (1995). These subdivisions com- 



xlvi 



bined into twenty-six states and Federal District of Brasilia. 
These states and Federal District form five major regions: 
North, including states of Acre, Amapa, Amazonas, Para, 
Rondonia, Roraima, and Tocantins; Northeast, including 
Alagoas, Bahia, Ceara, Maranhao, Parafba, Pernambuco, Piaui, 
Rio Grande do Norte, and Sergipe; Southeast, including 
Espirito Santo, Minas Gerais, Rio de Janeiro, and Sao Paulo; 
South, including Parana, Rio Grande do Sul, and Santa 
Catarina; and Center-West, including Federal District, Goias, 
Mato Grosso, and Mato Grosso do Sul. North Region, country's 
largest, covers 45.3 percent of national territory; Northeast, 
18.3 percent; Southeast, 10.9 percent; South, smallest, 6.8 per- 
cent; and Center-West, 18.9 percent. Brasilia seat of govern- 
ment, housing executive, legislative, and judicial branches. 

Government: Federative republic with broad powers granted to 
federal government. Constitution, reenacted/revised on 
October 5, 1988, establishes presidential system with three 
branches — executive, legislative, and judicial. Chief of state 
and head of government is president. Fernando Henrique 
Cardoso won 1994 presidential elections in first round on 
October 3, taking 54 percent of vote, and assumed office on 
January 1, 1995. President assisted by vice president (elected 
with president) and presidentially appointed and headed 
cabinet. Cardoso may stand for reelection in 1998. Bicameral 
National Congress (Congresso Nacional) consists of Federal 
Senate (Senado Federal), with eighty-one members (three for 
each state and Federal District) popularly elected to eight-year 
terms, and Chamber of Deputies (Camara dos Deputados), 
with 513 members popularly elected to four-year terms. 
Elections for both houses simultaneous and based on 
proportional representation weighted in favor of less populous 
states. Suffrage compulsory for Brazilians above age of 
eighteen. Highest court Federal Supreme Court (Supremo 
Tribunal Federal — STF), whose eleven justices, including chief 
justice, appointed by president to serve until age seventy. Each 
state has own judicial system. Federal revenue-sharing 
program, established by 1988 constitution, provides states with 
substantial resources. Framework of state and local 
government similar to federal government. Governors may 
stand for reelection to four-year terms in 1998. Federal District 
also governed by governor and vice governor. Governors have 
more limited powers than counterparts in United States 
because of centralized nature of Brazilian system and 1988 



xlvii 



constitution, which reserves to federal government all powers 
not specifically delegated to states. States and municipalities 
have limited taxing authority. 

National Election Dates: Presidential, congressional, and state 
elections occur simultaneously every four years in October and 
November; held in October-November 1994 and scheduled 
for 1998 and 2002. Dates of municipal elections: October- 
November 1996, 2000, and 2004. 

Politics: Returned to democratic civilian government in 1985 
after more than two decades of military rule (1964-85). 
President Fernando Collor de Mello elected in November 1989 
and took office on March 15, 1990, first directly elected 
president in twenty-nine years. Chamber of Deputies 
impeached Collor in September 1992 on corruption charges, 
and he was removed from office by Senate vote that December. 
His vice president, Itamar Franco, then assumed presidency. In 
October 1994, Brazil held elections for presidency, state 
governorships, Chamber of Deputies, and two-thirds of Senate. 
Fernando Henrique Cardoso (president, 1995- ) gained 
election on strength of heterodox alliance between his 
Brazilian Social Democracy Party (Partido da Social 
Democracia Brasileira — PSDB) and two center-right parties, 
Liberal Front Party (Partido da Frente Liberal — PFL) and 
Brazilian Labor Party (Partido Trabalhista Brasileiro — PTB). 
Alliance seen at time as strictly electoral, with little chance of 
lasting long into administration. Thus far, it has remained 
intact, with Cardoso adding Brazil's largest party, Brazilian 
Democratic Movement Party (Partido do Movimento 
Democratico Brasileiro — PMDB), to coalition immediately 
after election. Rivalries among parties for plum federal 
appointments in key states and regions have, however, plagued 
coalition, as has factiousness within parties. Congress uses 
committee system much like United States; there are six Senate 
committees and sixteen House committees. A notable 
distinction is absence of conference committees to work out 
differences between competing legislative texts; instead, bill 
modified by one house must be returned to originating house 
for up-or-down vote on modifications. Party leaders play key 
role in setting voting agenda. Also important are "rapporteurs" 
for individual bills; negative rapporteur's report can effectively 
kill bill before it reaches committee vote. Since Cardoso's inau- 
guration, Congress has devoted itself largely to constitutional 
reform. Each constitutional amendment requires approval by 



xlviii 



margin of two-thirds, twice over, in each house (total of four 
votes). Despite obstacles, Congress has moved constitutional 
reform forward farther and faster than expected, particularly 
in economic area. 

Political Parties: Fourteen political parties span most of 
political spectrum. PMDB (Brazilian Democratic Movement 
Party) Brazil's largest party; PFL (Liberal Front Party) is second 
largest party and largest on center-right; PTB (Brazilian Labor 
Party) is populist party confined to several western states; PSDB 
(Brazilian Social Democracy Party) includes President Cardoso 
and espouses a center-left social democratic agenda and free- 
market economy with greater involvement in health care and 
education; Brazilian Socialist Party (Partido Socialista 
Brasileiro — PSB) is leftist party; Communist Party of Brazil 
(Partido Comunista do Brasil — PC do B) still has Soviet-style 
platform. Other parties include Democratic Social Party 
(Partido Democratico Social — PDS) and Democratic Labor 
Party (Partido Democratico Trabalhista — PDT), populist party 
whose leaders, including Leonel de Moura Brizola, stress 
greater government role in addressing Brazil's social problems. 
Liberal Party (Partido Liberal) is also center-right party, 
popular among small businessmen at state and local levels in 
Sao Paulo and Rio de Janeiro; National Reconstruction Party 
(Partido da Reconstrucao Nacional — PRN) is party of former 
President Collor de Mello; Popular Socialist Party (Partido 
Popular Socialista — PPS) is former Brazilian Communist Party, 
renamed in 1993; Progressive Party (Partido Progressista — PP) 
is center-right party supporting market-oriented policies; 
Progressive Renewal Party (Partido Progressista Renovador — 
PPR) is another center-right party supporting free-market 
reforms; and Workers' Party (Partido dos Trabalhadores — PT) 
is European-style leftist party headed by party founder Luis 
Inacio "Lula" da Silva. 

Foreign Relations: Traditionally, United States-oriented but 
foreign policy increasingly diverse and pragmatic. Foreign 
policy dominated by trade concerns. Highly active and pro- 
fessional Ministry of Foreign Affairs popularly known as 
Itamaraty. Guiding principles of Brazilian diplomacy, as 
defined by President Cardoso, involve quest for greater 
democracy in international relations and support for economic 
multilateralism with clear and defined rules. Defense of 
principle of sustainable development (see Glossary) at Rio de 
Janeiro's Earth Summit in June 1992, conclusion in 1995 of 



xlix 



Uruguay Round of General Agreement on Tariffs and Trade 
(GATT — see Glossary), and desire for permanent seat on 
United Nations Security Council all part of these basic 
objectives. Parallel regional objectives include need for Brazil 
to seek regional options for increasing country's bargaining 
power. Brazilian proposal for creation of South American Free 
Trade Association (SAFTA) is important step in this direction. 

International Agreements and Membership: Party to Inter- 
American Treaty of Reciprocal Assistance of 1947 (Rio Treaty) 
(see Glossary), Treaty of Tlatelolco (see Glossary), and Missile 
Technology Control Regime (see Glossary). Until June 20, 
1997, Brazil refused to sign the Nuclear Nonproliferation 
Treaty (NPT). Memberships in international organizations 
many and varied, such as United Nations and specialized 
agencies; Organization of American States (see Glossary) and 
specialized agencies; regional trade and cooperation 
organizations, including Common Market of the South (Mer- 
cado Comum do Sul — Mercosul; see Glossary); international 
commodity agreements; and multilateral lending institutions. 

National Security 

Armed Forces: Total active-duty troops and officers: 314,700, 
including 132,000 conscripts (1997). Brazilian Army (Exercito 
Brasileiro), largest service (accounting for 66 percent of total 
armed forces), has 200,000 active-duty officers and troops, 
including 125,000 conscripts. Brazilian Navy (Marinha do 
Brasil) totals 64,700 members, including 1,300-member Naval 
Aviation (Aviacao Naval), 14,600-member Marines, and 2,000 
conscripts; and Brazilian Air Force (Forca Aerea Brasileira — 
FAB), also 50,000, including 5,000 conscripts. Reserves: trained 
first-line: 1,115,000 (400,000 subject to immediate recall); 
second-line: 225,000. 

Conscription: Twelve months officially; usually nine to ten 
months in practice, but can be reduced or extended by six 
months. 

Defense Budget: Total 1997: US$12 billion. Investment in 
armed forces (as percentage of government budget): 1.7 
percent (1995). Except 1990, military spending as percentage 
of federal budget has declined steadily since 1985. Fifth-ranked 
recipient of arms transfer agreements of developing nations in 



i 



1995, Brazil received US$800 million worth of arms. 

Military Organization: Army divided geographically into eleven 
military regions, each with military headquarters. Military 
regions subordinate to seven military commands: Southern 
Command (Porto Alegre), Planalto Military Command 
(Brasilia), Amazonian Command (Manaus), Eastern 
Command (Rio de Janeiro), Southeastern Command (Sao 
Paulo), Northeastern Command (Recife); Western Command 
(Campo Grande). Units include: eight divisions (three with 
regional headquarters); one armored cavalry brigade (two 
mechanized, one armored, one artillery battalion); three 
armored infantry brigades (each with two infantry, one 
armored, and one artillery battalion); four mechanized cavalry 
brigades (each with three infantry and one artillery battalion); 
thirteen motor infantry brigades (twenty-six battalions); one 
mountain brigade; four "jungle" brigades (seven battalions); 
one frontier brigade (five battalions); one airborne brigade 
(three airborne battalions and one special forces battalion); 
two coast and air defense artillery brigades; three cavalry guard 
regiments; twenty-eight artillery groups (four self-propelled, six 
medical, eighteen field); two engineer groups (each with four 
battalions, including two railroad battalions, to be increased to 
thirty-four battalions); helicopter brigade (forming, to 
comprise five helicopters per battalion). Navy best structured 
branch of armed forces in terms of quality of equipment and 
troop preparation. Two naval commands: Brasilia and Manaus. 
Five oceanic naval districts: Rio de Janeiro (headquarters, 1st 
Naval District), Salvador (headquarters, 2d Naval District), 
Natal (headquarters, 3d Naval District), Belem (headquarters, 
4th Naval District), and Rio Grande do Sul (headquarters, 5th 
Naval District). One riverine naval district: Ladario 
(headquarters, 6th Naval District). Air Force has three general 
commands — air, support, and personnel; organized into seven 
regional commands, as follows: 1st at Belem, 2d at Recife, 3d at 
Rio de Janeiro, 4th at Sao Paulo, 5th at Porto Alegre, 6th at 
Brasilia, and 7th at Manaus. Five operational commands: 
Tactical Command (ten groups), Coastal or Maritime 
Command (four groups), Transport Command (six groups), 
Special Transport Group (VIP), and Training Command. Also 
one Administrative Command (one group) (IISS). 

Police: Security forces, including state paramilitary Military 
Police (Policia Militar — PM), under army control and 
considered an army reserve, totaled 385,600 in 1997. 



li 




Acre (13) 
Alagoas (11) 
Amapa (4) 
Amazonas (1) 
Bahia (17) 
Ceara (7) 
Espirito Santo (21) 
Goias (18) 
Maranhao (5) 
Mato Grosso (15) 
Mate- Grosso do Sul (22) 
Minas Gerais (20) 
Para (3) 
Paraiba (9) 
Parana (25) 



States 

Pemambuco (10) 
Piaui (6) 

Rio de Janeiro (24) 
Rio Grande do Norte ( 
Rio Grande do Sul (27 
Rondonia (14) 
Roraima (2) 
Santa Catarina (26) 
Sao Paulo (23) 
Sergipe (12) 
Tocantins (16) 



Federal District 

Distrito Federal (19) 



Figure 1. Administrative Divisions of Brazil, 1997. 



In 



Introduction 



MORE LIKE A CONTINENT than a country, the Federative 
Republic of Brazil (Republica Federativa do Brasil) is geo- 
graphically larger than the conterminous United States. It is 
the world's fifth largest nation in physical size, exceeded only 
by Russia, China, the United States, and Canada. By far the 
largest country in Latin America, Brazil occupies nearly half 
the land mass of South America and borders every South 
American country except Chile and Ecuador. With 90 percent 
of its territory lying between the equator and the Tropic of 
Capricorn, Brazil is the world's largest tropical country. The 
Amazon Region has the world's largest river system; the Ama- 
zon is the source of 20 percent of the world's fresh water. 

Brazil's history prior to becoming an independent country 
in 1822 is intertwined mainly with that of Portugal. Unlike the 
other viceroyalties of Latin America, which divided into twenty 
countries upon attaining independence, the Viceroyalty of Bra- 
zil became a single nation, with a single language transcending 
all diversities and regionalisms. Brazil is the only Portuguese- 
speaking Latin American country, and its Luso-Brazilian cul- 
ture differs in subtle ways from the Hispanic heritage of most 
of its neighbors. During the late nineteenth and early twentieth 
centuries, millions of Italians, Germans, Arabs, Japanese, and 
other immigrants entered Brazil and in various ways altered the 
dominant social system. Their descendants, however, are nearly 
all Portuguese-speaking Brazilians. 

Except for a small indigenous Indian population, Brazilians 
are one people, with a single culture. Anthropologist Darcy 
Ribeiro attributes a "national ethnicity" to Brazil's melting-pot, 
disparate population, which has created a society that "knows 
itself, feels, and behaves as a single people." Unifying forces 
that have strengthened Brazilians' sense of national self-iden- 
tity include the nation's multiracial society and its various reli- 
gions; Brazilian Portuguese, music, and dance, particularly the 
samba and, more recently, Brazilian funk, a wildly popular ver- 
sion of the musical genres known in the United States as rap 
and hip-hop; the national soccer team, which won the World 
Cup championship for the fourth time in 1994; Edson Arantes 
do Nascimento (Pele), widely acknowledged as the greatest 
soccer player ever, who won three World Cups with Brazil and 



liii 



was declared an official national treasure by Brazil's National 
Congress (Congresso Nacional; hereafter, Congress); world- 
renowned Brazilian Formula 1 auto racers, such as Emerson 
Fittipaldi and the late Ayrton Senna; and the country's televi- 
sion networks, with their widely viewed soap operas called tele- 
novelas. Brazilian social scientists have used the concept of 
homem cordial (cordial man) to describe the Brazilian arche- 
type. Brazilians are generally a friendly, warm, and spontane- 
ous people. 

With an estimated 161 million people in early 1998, Brazil is 
the world's largest Roman Catholic nation, and its population 
is the world's sixth largest. By 2000 Brazil will have an estimated 
169 million people. Its population is largely urban; the urban- 
ization rate soared from 47 percent in 1960 to 80 percent in 
1996. Even the Amazon region is urbanized; 70 percent of its 
18 million people live in cities. The Amazonian city of Manaus, 
which still lacks a sewerage system other than the river, now has 
a population of 1.5 million and a highway to Venezuela. Brazil 
has at least fourteen cities with more than 1 million people. 
Greater Rio de Janeiro's population totaled 10.3 million in 
1995. Greater Sao Paulo, with 18.8 million people, is the 
world's third largest metropolitan area, after Tokyo and Mexico 
City. Although Sao Paulo's Metro is clean and efficiently moves 
more people in one day than Washington's Metro does in two 
months, the megacity is disorienting and suffers from extreme 
traffic congestion and air pollution. To alleviate this situation, 
Sao Paulo State in January 1998 revived a fifty-year-old plan to 
build a US$2.5 billion beltway around the city. 

The growth of Rio de Janeiro and Sao Paulo slowed during 
the 1980s and early 1990s, along with internal migration. More- 
over, Brazil's demographic growth rate fell from about 3 per- 
cent a year in the 1960s to only an estimated 1.22 percent in 
1995, even without the adoption of an official population-con- 
trol program. During this three-decade period, Brazilian fertil- 
ity rates decreased from 6.4 to about 2.3 children for each 
woman. The country's new demographic profile shows a gener- 
ally young population; nearly 50 percent of Brazilians are 
younger than age twenty. 

Some of Brazil's smaller cities, particularly those in the more 
developed South (Sul) and Southeast (Sudeste), have fared 
better than its megacities in their innovative approaches to 
urban ecology. Curitiba, the capital of Parana, has earned a 
worldwide reputation as a model city, not only for the develop- 



liv 



ing world but also the developed world, thanks to its former 
architect-mayor, Jaime Lerner (now governor of Parana). In 
June 1996, the chairman of the Habitat II summit of mayors 
and urban planners in Istanbul described Curitiba as "the most 
innovative city in the world." Often compared with a city in 
Switzerland or Sweden, Curitiba is a city that functions, even 
though its budget of US$1 billion a year is the same as that of 
Lausanne, a city with only one-tenth of Curitiba's population. 
Curitiba has taken new approaches to urban ills such as illiter- 
acy, homelessness, transportation and government service 
shortcomings, unemployment, pollution, and poverty. It has 
fifty-four square meters of green area per inhabitant, a widely 
praised trash-recycling system, and a world-class transportation 
system (used by 85 percent of the city's commuters). Curitiba's 
innovative professionals also include a heart surgeon, Randas 
J.V. Batista, who developed a revolutionary and potentially very 
important new heart-operation technique that surgeons 
around the world began learning about in June 1996. 

Brazil has many other superlatives. The news media include 
highly professional, large-circulation newspapers and maga- 
zines and the powerful television network of Rede Globo de 
Televisao (World Network), owner of TV Globo. Brazil has 
South America's most aggressive journalists. In the 1990s, they 
have investigated banking scandals, environmental abuses, 
massacres of Amazon Indians, murders of street children, and 
governmental corruption. Television reaches more than 80 
percent of Brazilian homes. TV Globo is Latin America's largest 
network and the world's fourth largest television broadcasting 
system (after ABC, NBC, and CBS). Its telenovelas are watched 
by 70 million Brazilians nightly and in addition are sold to sixty- 
eight nations, earning the network US$30 million annually in 
foreign profits. In 1996 Brazil was the only Latin American 
country with a communications satellite in orbit. In the print 
media, Veja, with a circulation of 1.2 million, is Brazil's most 
influential magazine and the world's fifth largest weekly news- 
magazine. All of these media have enabled Brazil to become 
the world's eighth largest advertising market, with US$4.5 bil- 
lion spent on advertisements in 1994 and an estimated US$6 
billion in 1995. 

Brazil has enormous technological know-how and industrial 
capabilities. As President Fernando Henrique Cardoso 
explained to the Wall Street Journal in May 1997, "Our people 
are known throughout the world for their creativity, their abil- 



lv 



ity to learn, to adapt to new circumstances, and to incorporate 
technical innovation on a daily basis." 

Brazil is the most highly industrialized country in Latin 
America. Its huge industrial base includes steel, automobiles, 
military aircraft (including the AMX jet fighter), tanks, hydro- 
electric power, and a nuclear power program. Its industrial 
base is so developed that the country exports high-technology 
aviation components, such as aircraft engines and helicopter 
landing-gear systems. Brazil's Alberto Santos Dumont after all 
was the "father of aviation." Brazil will construct a small part of 
the international space station. Major manufactured products 
include motor vehicles, aircraft (including the internationally 
popular EMB-120 Brasilia commuter turboprop and EMB-145 
regional jetliner), helicopters (Brazil has the world's seventh 
largest helicopter fleet), electrical and electronic appliances, 
textiles, garments, and footwear. Since lifting its ban on com- 
puter imports in October 1992, Brazil has become the world's 
fastest-growing computer market and a major producer of 
computer software. 

Brazil's major trading partners are the United States, Ger- 
many, Switzerland, Japan, the United Kingdom, France, Argen- 
tina, Mexico, and Canada. Exports represent 7.3 percent of 
Brazil's gross domestic product (GDP — see Glossary), and 
industry accounts for about 41 percent, a pattern found in 
some developed countries. Once an industrial powerhouse of 
the developing world, Brazil now counts on services for 48 per- 
cent of its GDP. 

Brazil's economy, Latin America's biggest and the world's 
eighth largest, is greater than Russia's and twice as large as 
Mexico's. Its economy will be the sixth largest in the world by 
2015, according to a Ministry of Finance prediction. In 1997 
Brazil had an estimated GDP of US$775.5 billion, according to 
the Economist Intelligence Unit (EIU). 

Brazil possesses enormous natural resources, including the 
world's largest rain forest. The country contains two-thirds of 
the endangered Amazon rain forest, a region representing 60 
percent of the national territory. Sixty-six percent of Brazil's 
territory is still covered by forest. The Amazon rain forest and 
Pantanal (Great Wetlands) of Mato Grosso are two of the larg- 
est wildlife reserves on earth. The Amazon region is home to 
half of the earth's species and almost one-third of the world's 
250 primates. Researchers in Brazil have identified a new pri- 
mate species in Brazil six times in six years, including 1996. The 



lvi 



Pantanal, the world's largest freshwater wetland (larger than 
the state of Florida), contains flora and fauna that cannot be 
found anywhere else in the world, including eighty kinds of 
mammals, 230 varieties of fish, 650 species of birds, and 1,100 
types of butterflies. 

The country's vast river systems serve not only as a transpor- 
tation network but also as an energy source. Brazil's hydroelec- 
tric plants provide 94 percent of the country's electricity. Its 
huge dams, including Itaipu, easily the world's largest hydro- 
electric power plant, generate vast amounts of hydroelectric 
power (a potential of at least 106,500 megawatts). Brazil is also 
the world's largest producer of bananas, coffee, and orange 
juice. It has the world's largest iron mine and vast stores of pre- 
cious minerals. It is the world's largest exporter of iron and a 
major exporter of steel. 

Sao Paulo, the financial center of Brazil, is an economic 
power in itself; the state's GDP of US$240 billion is larger than 
Poland's and the third largest economy in South America, after 
Brazil itself and Argentina. Its GDP per capita income of 
US$7,000 is nearly twice the figure for all of Brazil. Sao Paulo 
has half of the country's bank accounts. Its largest bank, with 
US$33.3 billion in assets and 1,900 branches, is the Brazilian 
Discount Bank (Banco Brasileiro de Descontos — Bradesco), 
Latin America's third largest and possibly most powerful bank 
holding company; Bradesco's profits in 1996 totaled US$800 
million. The Sao Paulo Stock Exchange (Bolsa de Valores do 
Sao Paulo — Bovespa) has been one of the fastest growing in 
the world, at least until May 1997. Bovespa had a market capi- 
talization of US$245 billion, far outranking the Mexican 
exchange's US$118 billion and five times that of the Buenos 
Aires exchange. In early 1997, the Bovespa index gained 86 
percent, but by early November it had fallen 37 percent, a casu- 
alty of turmoil in world financial markets. 

As a result of having to adjust to three decades of hyperinfla- 
tion, Brazil has one of the world's most sophisticated and effi- 
cient banking systems. In 1993 the top forty Brazilian banks 
earned US$9 billion by lending inflation-eroded deposits to 
the government at high short-term rates. During the period of 
hyperinflation, the number of banks mushroomed from 106 
institutions in 1988 to 246 in 1994. In 1996 Brazil had six of 
Latin America's ten largest banks, including the number-one 
ranked Federal Savings Bank (Caixa Economica Federal — 
CEF), with US$90.8 billion in assets. 



Ivii 



In 1995 Brazil was ranked third, after China and Mexico, for 
planned investments by American multinational companies. 
The second largest United States trading partner in the hemi- 
sphere in 1995-97, it is first in foreign direct investment from 
the United States, with US$41 billion. According to President 
Cardoso, foreign direct investment in Brazil in 1996 totaled 
US$9.4 billion, as compared with US$3.9 billion in 1995 and 
was expected to exceed US$14 billion in 1997. Multinationals 
based in Brazil remitted US$4 billion in dividends to their par- 
ent corporations during 1995. The energy, mining, petroleum, 
and telecommunications sectors expect investments of US$24 
billion by the end of the 1990s. 

Amid the chaos of inflation, Brazil's private sector had 
become the most dynamic in Latin America by 1994, with the 
automobile industry leading the country's economic upturn. 
Once the symbol of the "economic miracle" period of 1968-74 
but declared all but defunct in the 1980s, the automobile sec- 
tor — aided by tax breaks, an end to the list of banned imports, 
and the relaunching of the Volkswagen Beetle — was revived in 
1990. Brazil's automobile industry, Latin America's biggest 
industrial complex, overtook Italy and Mexico in 1993 to 
become the tenth largest producer of cars in the world. Brazil 
produced 1.58 million cars in 1994 and 1.65 million in 1995, 
making it the world's ninth largest automotive manufacturer. 
Helped by a 70 percent tariff on imports by foreign automobile 
manufacturers, sales totaled about 1.7 million vehicles in 1996 
and were expected to reach 2.5 to 3 million cars and trucks by 
2000. However, the influx of new cars has made congestion and 
pollution in already clogged cities even worse. Furthermore, 
carmakers with manufacturing facilities in Brazil have been 
uncompetitive because of a tariff reduction on automobile 
imports mandated by the Common Market of the South (Mer- 
cado Comum do Sul — Mercosul; also known as Mercosur — see 
Glossary). General Motors was planning in 1997 to compete 
with a new US$9,000 automobile that would be the most 
affordable one in Brazil. 

In the governmental realm, Brazil is the third largest democ- 
racy (after India and the United States). It has had civilian 
democratic rule since the end of the military dictatorship 
(1964-85). The period of military rule was relatively benign 
when compared with military dictatorships in the Southern 
Cone countries of Argentina, Chile, and Uruguay. In recent 
decades, Brazil has been relatively free from revolutionary vio- 



lviii 



lence and terrorism, with the exception of a left-wing terrorist 
campaign in the late 1960s and early 1970s. Indeed, the foreign 
image of Brazilians as a joyful, fun-loving, and nonviolent peo- 
ple began to fade as a result of the regime's repression, prima- 
rily from 1968 to 1972. 

The constitution of October 5, 1988, Brazil's eighth, pro- 
vides for a presidential system with several vestiges of a mixed 
parliamentary system. Although the 1988 constitution reestab- 
lishes many of the prerogatives of the Congress, the president 
retains considerable "imperial" powers. According to political 
scientist David V. Fleischer, Brazilian presidents may still have 
more "imperial" powers than their United States counterparts 
by being less accountable to Congress and being able to make 
innumerable political appointments. 

Under a system of checks and balances similar to the United 
States system, the three branches of government operate with 
substantial harmony and mutual respect, but on rare occasions 
one of the branches may challenge or reject the interference of 
the others. However, as Professor Fleischer points out, execu- 
tive-legislative conflict is inherent in the system because the 
president is elected directly by a national constituency, whereas 
Congress is elected by very parochial regional interests. Rural 
states of the North (Norte) and Northeast (Nordeste) elect 
proportionately more members of Congress than the industrial 
and more populous states of the South and Southeast, accord- 
ing to political scientist Ricardo Tavares. 

The constitution continues the holding of municipal elec- 
tions two years after presidential elections. Thus, municipal 
elections were held in 1988, 1992, and 1996 and are scheduled 
for 2000 and 2004, while both state and national elections are 
scheduled for 1998 and 2002. The number of political parties 
increased from eleven in 1987 to eighteen in 1996, of which 
eight are significant. Unlike in the United States, where two 
main parties are national organizations, Brazilian parties are 
regionally based. 

A national plebiscite was held on April 21, 1993, to decide 
the form of government (a republic or, oddly enough, a consti- 
tutional monarchy) and the system of government (presiden- 
tial or parliamentary), and it overwhelmingly reaffirmed Brazil 
as a presidential republic. However, a constitutional revision 
enacted in 1994 constrained the chief executive by shortening 
the presidential term from five to four years, as of January 
1995, in exchange for allowing immediate reelection 



lix 



(approved by the Chamber of Deputies (Camara dos Deputa- 
dos) in January 1997 and the Federal Senate (Senado Federal; 
hereafter, Senate) in June 1997). In mid-1997 there were seri- 
ous plans to set up a parliamentary government in Brazil by 
2002. 

With its modernistic capital of Brasilia and its booming 
economy, Brazil was poised in the early 1970s during the "eco- 
nomic miracle" period (1967-74) to become "the country of 
the future." On being inaugurated on April 21, 1960, Brasilia 
was referred to as "the city of the twenty-first century" and a 
"monument to the future." However, the US$10 billion needed 
to build and support the Federal District (Distrito Federal) 
started an inflationary spiral that was not tamed until late 1994. 
Far removed from the nation's realities, the sterile capital suc- 
ceeded only in corrupting the political process by creating an 
enclave of privilege and self-interest. The 1990 census indi- 
cated that the wealthiest 10 percent of Brasilia's population of 
about 500,000 residents earned 75 percent more than the top 
10 percent in the rest of the country. 

Although Lucio Costa's jetliner-design for the futuristic capi- 
tal was supposed to reflect Brazil's aspirations of grandeza 
(greatness), Brasilia's once-dramatic architecture, designed in 
large part by Oscar Niemeyer, now inspires feelings of eerie 
alienation. Niemeyer, who is building a museum of modern art 
in the city, now refers to Brasilia as "the city of lost hopes." 
More than half of the 1.2 million residents in the city's metro- 
politan area, including most of the capital's poor, live in more 
than a dozen satellite cities (cidades satelites), in favelas as far 
away as 150 kilometers from the city's center. Brasilia is reputed 
to have the highest rates of divorce and suicide of any Brazilian 
city. In its favor, however, Brasilia has little air pollution, its traf- 
fic congestion is tolerable, and its crime rate is relatively low. 

Despite its many superlatives, the image of Brazil as a land of 
immense rain forest, cordiality, samba, political conciliation, 
and racial harmony has masked the reality of urban violence, 
chronic political instability and corruption, environmental 
depredation, highly unequal income distribution (the worst in 
the world, according to the World Bank — see Glossary), 
extraordinarily high levels of abandonment and abuse of chil- 
dren, and severe economic and social disequilibrium. 

Beginning in the early 1970s, crime soared as the consumer 
expectations of poor Brazilians, raised by television advertising, 
were crushed. Violence has become an increasingly visible 



lx 



aspect of Brazilian society, in both rural and urban areas, and 
includes rising vigilantism by citizens. There has also been an 
epidemic of husbands killing their wives with impunity by 
invoking the "defense of honor" code. By the early 1990s, 
homem cordial no longer seemed to fit the Brazilian archetype, 
as news of massacres of Indians by miners, landless activists by 
landowners and police, and street children and prisoners by 
police became more frequent. 

Death squads {esquadroes de morte) of off-duty or retired 
policemen target criminals in the favelas of Rio de Janeiro and 
Sao Paulo and street children, but to little effect. Their actions 
only seem to generate more crime. Civilian deaths at the hands 
of the Sao Paulo Police increased from an average of 34.1 per 
month in 1993 to 56 per month in the first half of 1996, accord- 
ing to the Sao Paulo Police ombudsman office. Between 1992 
and 1996, Sao Paulo Police killed 2,203 persons. Military Police 
(Policia Militar — PM) members were suspected in at least sev- 
enteen of forty-nine massacres in Sao Paulo in the first eleven 
months of 1995. Efforts to control the Military Police in metro- 
politan Sao Paulo supposedly improved their record of killings 
from 1,190 in 1992 to 106 in 1996. 

Nevertheless, TV Globo's showing of videotapes of innocent 
civilians being shot, beaten savagely, or robbed by uniformed 
Military Police members in working-class suburbs of Sao Paulo 
in early March 1997 and Rio de Janeiro in early April shocked 
the country and caused profound soul-searching in Brazil. A 
poll taken in early April 1997 by Folha de Sao Paulo found that 
fewer than half of the people surveyed feared criminals more 
than they feared the police, and that 42 percent of all residents 
in the city of Sao Paulo had either experienced police violence 
first-hand, or knew someone who had. According to Jornal do 
Brasil, in the first half of 1996 the Rio de Janeiro police killed 
20.5 civilians per month, as compared with an average of 3.2 
persons per month prior to June 1995. 

The world's ninth most violent city by 1979, Greater Rio de 
Janeiro reportedly has recorded more than 70,000 homicides 
since 1985. In the first nine months of 1995, there were 6,012 
homicides in the city, a 10 percent increase over 1994. About 
90 percent of Rio de Janeiro's violent crime is drug related and 
involves minors, whether as victims or perpetrators. In 1994-95 
the military was deployed in Rio de Janeiro's favelas to carry 
out anti-drug-trafficking functions, normally a police responsi- 



lxi 



bility. However, the temporary military presence in the favelas 
had no real impact on controlling the city's crime problem. 

By 1996 kidnappings for ransom of leading businessmen and 
socialites in Rio de Janeiro and Sao Paulo had increased to an 
estimated fifty per month since 1994, in comparison with a 
reported seven in 1988. Kidnappings increased by 22.8 percent 
and bank robberies by 89.3 percent in Rio de Janeiro State in 
1995, in relation to 1994, according to the Secretariat for Pub- 
lic Security (Secretaria de Seguranca Publica — SSP). A poll 
conducted by the DataBrasil Research Institute (Instituto de 
Pesquisas DataBrasil) in late 1995 found that 76.5 percent of 
600 cariocas (Rio de Janeiro residents) felt that the city had 
become more violent during 1995 than in 1994. On November 
28, 1995, at least 70,000 cariocas, rallying under the slogan 
Reage, Rio! (React, Rio!), marched to protest the violence. By 
September 1996, Rio de Janeiro's crime rate was declining for 
the first time in years, with significant reductions in kidnap- 
pings and bank robberies, thanks to an energetic new com- 
mand of the police force. 

At the national level, homicide has had a major impact on 
Brazilian youths. A survey of 59.4 million Brazilian children, 
published on November 17, 1997, found that homicide had 
become the leading cause of death among fifteen- to seven- 
teen-year-olds in Brazil, with its rate more than tripling since 
1980. The survey, conducted by the Brazilian Institute of Geog- 
raphy and Statistics (Fundacao Instituto Brasileiro de Geogra- 
fia e Estatistica — IBGE) and the United Nations Children's 
Fund (UNICEF), found that 25.3 percent of deaths in that age- 
group were homicides, as compared with 7.8 percent in 1980. 

Police corruption has also been a growing problem. In late 
1995, the New York Times reported that, according to an inter- 
nal report on the notoriously corrupt Rio de Janeiro Police 
Department, an estimated 80 percent, or 9,600 members, of 
the 12,000-member force were dishonest and collected more 
than US$1 million a month in bribes or extortion from drug 
dealers and kidnappers. Brazilians have cited the need for a 
reformed and unified police force under federal control. On 
April 7, 1997, in an attempt to change the profile of Brazil's 
police forces, President Cardoso created a National Secretariat 
of Human Rights (Secretaria Nacional dos Direitos 
Humanos — SNDH), which is under the authority of the Minis- 
try of Justice. The federal crackdown on human rights abuses 
and diminished earning power under the three-year-old 



lxii 



national economic stabilization policy led to a wave of nation- 
wide police strikes in July 1997. As a result, Brazilian cities were 
hit by crime waves. 

No issue has focused more world attention on Brazil since 
the 1970s than the destruction of the Amazonian jungle. Both 
Amazonia (the Amazon region) and the Pantanal are suffering 
the effects of human intervention from deforestation, slash- 
and-burn agriculture (see Glossary), highway construction, ille- 
gal mining, drug trafficking, and pollution. Tropical wood cut- 
ters have already bought up more than 4.5 million hectares of 
virgin forest in the Amazon Region, which holds about one- 
third of the world's remaining tropical woods. Dam building 
has also destroyed large swaths of rain forest. For example, the 
Tucuruf Reservoir inundated 2,000 square kilometers of tropi- 
cal forest. 

The topics of rapid deforestation and extensive burning of 
the Amazon rain forest and environmental pollution received 
unprecedented international attention in the late 1980s and 
early 1990s. Water and air pollution had also become a serious 
problem for Brazil. Sao Paulo State's Tiete is so polluted that in 
1992 the state was forced to launch a US$2.6 billion program to 
revive it. In June 1992, Rio de Janeiro hosted the United 
Nations (UN) Conference on the Environment and Develop- 
ment (Eco-92). However, the Brazilian government's attention 
to the problems of deforestation and pollution waned follow- 
ing Eco-92, despite the creation in late 1993 of the Ministry of 
Environment and the Amazon Region. 

In the mid-1990s, discussion of public policies intended to 
promote sustainable development (see Glossary) remained 
intense. One issue concerns the Pantanal, which is threatened 
by South America's massive waterway project, Hidrovia, a pro- 
posed 3,460-kilometer waterway along the world's fourth-larg- 
est river system, the Tiete-Parana, intended to open the 
continent for the region's new free-trade bloc. According to a 
study by the Environmental Defense Fund, "channelization, 
dredging, channel simplification, and water control structures 
will drastically change the hydrology in the Pantanal region," 
causing the eventual "loss of biodiversity as habitats decline and 
exotic species are introduced via barge traffic and human 
migrations." However, Brazil shelved the project in early 1998. 

As a result of deforestation and highway construction, 
Amazonia now consists of thirteen different regions that are in 
a critical political, social, economic, and environmental situa- 



lxiii 



tion, according to a study begun in 1991 by the IBGE and the 
Strategic Affairs Secretariat (Secretaria de Assuntos Estrategi- 
cos — SAE) of the presidency of the republic. Since 1970 an 
area larger than 86 million hectares has been deforested. Mar- 
cio Nogueira Barbosa, director general of the government's 
National Institute of Space Research (Instituto Nacional de 
Pesquisas Espaciais — INPE), citing INPE statistics for 1995, told 
the New York Times on October 12, 1995, that "burnings in the 
Amazon Region appear to be approaching the worst levels 
ever." 

During 1992-97 the Brazilian government claimed that 
destruction of the Amazon rain forest had slowed. However, 
Brazilian government information on the extent of forest clear- 
ing in the Amazon had dried up, and, five years after Eco-92, 
the government appeared unaware of what was happening in 
the Amazon rain forest. The New York Times reported that new 
data released in September 1996 showed that deforestation of 
the Amazon rose by 34 percent during 1991-94, from 6,913 
square kilometers in the 1990-91 burning season to 9,253 
square kilometers a year by 1994, consuming rain forest the 
size of Denmark. A study by the World Wildlife Fund (WWF) 
released in mid-1997 singled out Brazil as the nation with the 
highest annual rate of forest loss in the world. The New York 
Times reported on November 3, 1997, that burnings in the 
Amazon region were up 28 percent over 1996, according to sat- 
ellite data. 

Environmentalists have charged that tobacco and soybean 
cultivation, in addition to trans-Amazonian highway construc- 
tion, has played a major role in Brazil's deforestation. Tobacco 
plantations occupied 271 million hectares of the nation's ara- 
ble land in 1990. Brazil, which produced 450,000 tons of 
tobacco in 1994, is the world's fourth leading tobacco pro- 
ducer, after China, the United States, and India. Soybean culti- 
vation has had a similarly devastating effect on the rain forest. 
The largest areas deforested in the first half of the 1990s from 
expanding soybean cultivation were in Mato Grosso State and 
the southern part of Maranhao State. 

Ninety percent of Brazilians live on 10 percent of the land, 
mostly along the 322-kilometer-wide east coast region. The 
Atlantic Forest (Mata Atlantica) once stretched continuously 
along the entire coast of Brazil, extending far inland, and cov- 
ering an area equivalent to France and Spain combined. Today, 
less than 7 percent of it remains, all in scattered fragments, and 



lxiv 



it is one of the world's two most threatened tropical forests. 
Many of Brazil's 303 species of fauna threatened with extinc- 
tion are in the Atlantic Forest region, which contains 25 per- 
cent of all forms of animal and plant life existing on the planet. 
The region's biodiversity is forty times greater than the Ama- 
zon's. 

Brazil's National Indian Foundation (Fundacao Nacional do 
Indio — Funai) estimates that the indigenous Indian popula- 
tion, with about 230 tribes located in about 530 known Indian 
reservations in Brazil, totals 330,000 members. An estimated 
10,000 to 15,000 Indians have never had contact with Brazilian 
government officials. About 62 percent, or 137,000, live in the 
Amazon region. They are the descendants of what could be the 
oldest Americans. According to a team of archaeologists led by 
Anna C. Roosevelt, radiocarbon dating of material in a cave 
located near Monte Alegre, between Manaus and Belem, shows 
that early Paleo-Indians were contemporaries of the Clovis peo- 
ple in the southwestern United States and had a distinctive for- 
aging economy, stone technology, and cave art, dating back 
between 10,000 and 11,200 years ago. 

One-tenth of Brazil's national territory is to be set aside for 
its Indian population, according to the constitution. However, 
fewer than half of the reservations have been demarcated, and 
the issue has continued to be controversial. Settlers and gold 
miners have massacred Indians. In May 1996, the Ministry of 
Justice published decrees recognizing the existence of seven- 
teen indigenous areas in Brazil, totaling 8.6 million hectares. 
Each Brazilian Indian (including children) has on average an 
area of 400 hectares on which to live. By comparison, Native 
Americans in the United States live on only eighteen hectares 
per person. Some members of Brazil's Congress believe that 
the policy gives too much land to only two-tenths of the popula- 
tion. 

A decree signed by President Cardoso in January 1996 did 
not include the Indians as one of his priorities. By permitting 
states, municipalities, and non-Indian individuals to contest 
demarcation of Indian land, the decree alarmed indigenous 
support groups. The executive order could end much of the 
violence against the Indians, by giving non-Indians a legal 
forum. However, official figures indicate that 153 of the 554 
areas recognized by the government as Indian territories are 
liable to be revised under the decree. For example, in October 
1996 a government decision on whether to uphold claims by 



lxv 



12,000 Indians, most of them from the 30,000-member Macuxi 
tribe, to more than 40 percent of 225,116-square-kilometer 
Roraima, Brazil's northernmost state, was put on hold indefi- 
nitely as a result of legal challenges by non-Indians. 

Despite its vast natural resources and economic wealth, Bra- 
zil has an overwhelmingly poor population. Relatively few Bra- 
zilians have benefited from the economy. In a country with 
some of the world's widest social differences, grinding poverty 
and misery coexist with great industrial wealth; 20 percent of 
the population is extremely poor and 1 percent extremely 
wealthy. Brazil's Gini index (see Glossary) in 1991 was 0.6366. 
According to the UN, Brazil had the most uneven distribution 
of wealth in the world in 1995. The richest 10 percent of Brazil- 
ians hold 65 percent of Brazil's wealth (GDP), while the poor- 
est 40 percent share only 7 percent. Brazil placed sixty-eighth 
out of 174 countries in the UN's 1997 human development 
index (see Glossary). 

In the mid-1990s, at least one-fifth of the population, or 
about 32 million people, lived in extreme poverty (see Glos- 
sary), making less than US$100 a month. However, the anti- 
inflation policies of the Cardoso government helped pull 13 
million Brazilians out of poverty, according to the Applied Eco- 
nomic Research Institute (Instituto de Pesquisa Economica 
Aplicada — IPEA). During Cardoso's first three years in office, 
the number of people living below the poverty level dropped 9 
percentage points to 21 percent. Thus, poverty in Brazil today 
is proportionately less, even though it is more visible and 
shocking, especially in the cities. 

An estimated 45 million children and young people live in 
inhuman conditions, and the number of child workers has 
been as high as 10 million. Children from large poor families 
start working from the age of ten in order to help their parents. 
According to the IBGE, in 1995 there were 7.5 million Brazil- 
ian workers younger than eighteen, a group that represents 
11.6 percent of the work force. However, the IBGE reported 
that the number of children between the ages of ten and four- 
teen who were employed decreased by 163,000 from 1993 to 
1995. Some 3 million workers are between ten and fourteen 
years of age. Nongovernmental organizations (NGOs) estimate 
that anywhere from 500,000 to two million Brazilian children 
are forced into prostitution every year. 

The vast substratum of the population lacks adequate hous- 
ing, employment, education, health care, or any social security. 



Ixvi 



An estimated 10 million Brazilian families are homeless. The 
government spends only US$80 per person annually on public 
health, less than a third of what Argentina spends. Conse- 
quently, the health system is struggling to survive; its employees 
are often overworked and underpaid, and corruption is 
endemic. In this context, the new law that took effect January 

I, 1998, mandating organ donations for transplants unless the 
person applies for an exemption, sparked fear and outrage. 

Brazil stands out for its sharp regional and social disparities. 
Of Brazil's 39.1 million poor in 1990, 53.1 percent were in the 
poverty-stricken Northeast and 25.4 percent were in the pros- 
perous Southeast. According to the IBGE, in 1996 the more 
developed Southeast and South regions had 63 million and 
23.1 million people, respectively, who generated about 75 per- 
cent of the country's GDP. By contrast, the Northeast had 45 
million residents and generated only about 13 percent of Bra- 
zil's GDP. The huge North and Center-West (Centro-Oeste) 
regions, which occupy 64.1 percent of Brazil's total area, had 

II. 1 million and 10.2 million residents, respectively, and also 
generated only about 13 percent of Brazil's GDP. 

In 1988 the GDP per capita income of the Southeast was 43.6 
percent higher than the national average, and that of the 
Northeast was 37.5 percent lower. Brazil's GDP per capita 
income was US$5,128 in 1997, as compared with US$3,008 in 
1994, according to the IBGE. However, the 1997 GDP per cap- 
ita was practically meaningless because of the vast disparity 
between north and south or, more specifically, the Southeast 
and Northeast. Whereas Sao Paulo State had a US$7,000 GDP 
per capita in 1994, Pernambuco, a relatively prosperous North- 
east state, had only US$1,500. 

Brazil's regional and social disparities are also reflected in 
the great inequalities of its education system. Illiteracy is wide- 
spread, particularly in the poor states of the Northeast and 
North. In 1995, according to Ministry of Education statistics, 18 
percent of Brazilians over fifteen years of age could not read or 
write. Brazil will enter the twenty-first century with an esti- 
mated illiteracy rate of 16 percent. (Functional illiteracy in Bra- 
zil is as high as 60 percent.) Half of students nationwide repeat 
the first grade through a system of routine flunking. It takes an 
average of 11.4 years for students to complete the first eight 
years of education, and only 4.5 percent of all students who 
start school end up enrolling in a university. In 1994 UNICEF 
rated Brazil's basic education system as being in last place in 



lxvii 



world ranking, with large rates of nonattendance in poor states. 
As much as 68 percent of the electorate, or 65 million people, 
never finish primary school. In a hopeful development, how- 
ever, primary education in Brazil is being radically reformed. 

In 1995 the countrywide average salary was US$650 per 
month, and the minimum wage amounted to US$780 per year. 
In April 1995, the Cardoso government reluctantly raised the 
minimum monthly salary to 100 reals (R$100; Portuguese sin- 
gu\ar=real, pronounced hay-OW; for value — see Glossary). In 
1994, when the minimum monthly salary was R$70 a month 
(about US$58), half the population earned less than US$240 a 
month, and about 15 million people, including 11.5 million 
pensioners, were on the minimum wage. The income of about 
12 million Brazilians is less than US$65 per month. 

Brazil's official statistics on employment, incomes, consump- 
tion, and living standards do not provide an accurate portrayal 
of the real Brazil. The black market enables millions of Brazil- 
ians to get by in a country where household appliances, auto- 
mobiles, compact disks (CDs), restaurant food, and other 
consumer items cost more than in France, Germany, or the 
United States. The country's vast informal economy (see Glos- 
sary) produces from US$200 billion to US$300 billion per year, 
according to figures from the IBGE. Brazil's informal market, 
consisting of thousands of small to medium-size businesses that 
neither abide by government regulations nor pay taxes, is three 
times larger than the Portuguese economy and equal to that of 
Sweden. The illegal market provides an income for an esti- 
mated 30 million Brazilians. According to an early 1997 esti- 
mate by the weekly Sao Paulo newsmagazine IstoE, about half of 
the country's workforce is employed in the black market. In 
Sao Paulo only 52 percent of the workforce is employed in the 
formal economy, according to the Interunion Department for 
Statistics and Socioeconomic Studies (Departamento Inter- 
sindical de Estatistica e Estudos Socio-Economicos — DIEESE). 
In Rio de Janeiro, one in every four persons works in informal 
jobs. 

Brazil's regional income disparities have produced massive 
migration to favelas, particularly in Rio de Janeiro and Sao 
Paulo. By 1996 the country's poverty had become predomi- 
nantly urban. The IPEA estimated that 23 million of the 30 mil- 
lion poor live in cities, with 9 million of them in big cities — half 
of them in Rio de Janeiro and Sao Paulo. In Rio de Janeiro, 
which has the largest concentration of poor migrants, 17 per- 



lxviii 



cent of the city's metropolitan population, or 1 million people, 
live in hillside favelas. Although rampant crime and disease 
remain entrenched in the favelas, steps have been taken to 
improve the living conditions. For example, Rio de Janeiro has 
slowed the growth of its favelas by prohibiting new settlements, 
and more than 300,000 residents have been moved to new 
homes. Sao Paulo's huge Cingapura project has been replacing 
243 favelas, containing 500,000 people, with low-rise blocks of 
apartment buildings offering low-interest mortgages. 

Brazil is steeped in five centuries of Roman Catholicism, but 
the religious affiliation of the Brazilian population has not 
remained unaffected by a decade of corruption, inflation, and 
economic hard times under civilian rule. About 93 percent of 
Brazilians identified themselves as Catholic in 1960; by 1993, 
however, the figure had dropped to 72.5 percent. Only an esti- 
mated 10 million of Brazil's Roman Catholics attend Mass regu- 
larly, and most Brazilian Catholics ignore the conservative 
Roman Catholic Church's teachings on family planning meth- 
ods. The rapid growth and spreading influence of evangelical 
churches, such as the 3.5 million-member Universal Church of 
the Kingdom of God (Igreja Universal do Reino de Deus), have 
put into question the Vatican's characterization of Brazil as the 
world's largest Catholic country. Millions of Brazil's poor have 
turned away from the Roman Catholic Church and the libera- 
tion theology (see Glossary) that it began to espouse in the 
1970s. 

Instead, poorer Brazilians — more interested in spiritualism, 
hard work, sober living habits, and individual advancement 
than the political causes promoted by liberation theologists — 
have embraced Protestantism by the millions. By 1994 about 22 
percent of the population (an estimated 35 million Brazilians) 
was Protestant, as compared with only 3.7 percent in 1960. 
Protestantism has swept the country because Brazilian culture, 
which is both spiritual and pragmatic, interacts readily with the 
Pentecostal message delivered by plain-speaking, blue-collar 
evangelical pastors, many of whom are blacks, in contrast to the 
Latin language of a Catholic Mass. The Pentecostal churches 
offer more social support in prayer groups and give rural 
migrants a feeling of security in large cities. 

Competing with the evangelizing Protestants is the Catholic 
Charismatic Renewal, whose members practice an estatic 
prayer style, emphasizing lively music, "healings," and speaking 
in tongues. With a claimed 8 million active Charismatic Catho- 



lxix 



lies, Brazil is considered to be the world's leading center of the 
movement 

Other former Roman Catholics have been lost to espiritas, a 
cult founded by a French mystic, and Afro-Brazilian religions, 
such as the Afro-centric candomble and the twentieth-century 
cult more reflective of Brazilian urban life called umbanda. 
Owing to a Brazilian proclivity toward magic and mysticism, 
Afro-Brazilian cults have attracted members from all social 
classes, professions, and ethnic groups, including Brazilians of 
German, Italian, or Japanese ancestry. However, Christian 
evangelical churches have been drawing increasing numbers of 
former candomble and umbanda worshipers. 

At least 44 percent of Brazil's much-touted "racial democ- 
racy" is black (6 percent) or of mulatto (mixed) heritage (38 
percent), while at most 55 percent is of European (mostly Por- 
tuguese) descent. In socioeconomic terms, the subsistence- 
level living standards of the black population reflect a long his- 
tory of racial discrimination. Tens of millions of Brazilians liv- 
ing in poverty are overwhelmingly black, the descendants of 
slaves. Racial friction is a relatively new phenomenon. Presi- 
dent Cardoso, author of a classic study on Brazilian blacks, 
admitted in November 1995 that discrimination against blacks 
is still a problem. For example, the Northeastern city of Salva- 
dor, which is 80 percent black, has never had a black mayor. 
Blacks are almost totally absent from high government and mil- 
itary posts, although President Cardoso's cabinet has a black 
member (soccer legend Pele, the minister of sports). Two 
black women were elected to the Senate in 1994, but there 
were only eleven black federal deputies out of 513 in Novem- 
ber 1995. Celso Pitta, a black, was elected mayor of Sao Paulo 
on October 3, 1996. Few blacks occupy high positions in busi- 
ness and other professions. 

Largely marginalized (marginality — -see Glossary), Brazil's 
blacks have an illiteracy rate twice that of whites and an average 
income less than half that of whites. Nearly 40 percent of non- 
whites have four years or less of schooling. Very few blacks 
make it to the university; blacks and mixed-race people repre- 
sent a mere 1 percent of the student body at the nation's larg- 
est university, the University of Sao Paulo (Universidade de Sao 
Paulo — USP) . Black and mixed-race Brazilians were invisible in 
the print media until the founding of BrasilRaca (Brazil Race), 
a magazine geared to them, in September 1996 (300,000 cop- 
ies of the first issue were sold). 



Ixx 



Brazilian women, although constituting more than half of 
the population, traditionally have also been marginalized in 
politics. Only 868 women out of 12,800 candidates ran in the 
1994 general elections. Only six of eighty-one senators and 
only thirty-four of 513 deputies are women. Only 171 of 4,973 
mayors are women, and just 3.5 percent of 55,000 city council 
members nationwide are women. However, as a result of a 1995 
quota law that requires at least 20 percent of the candidates of 
each political party to be women, an estimated 75,000 women 
participated in the October 3, 1996, election for mayors and 
members of city councils. According to Professor Fleischer, for 
the first time, two state capitals — Maceio and Natal — had exclu- 
sively female runoffs, and three other capitals had a woman in 
the runoff. He also noted that about 100,000 women ran for 
city council in 1996, as compared with only 869 in 1992. 

In the countryside, land concentration, landlessness, home- 
lessness, and joblessness are major issues. At least 500,000 rural 
jobs have been lost since the government formally ended its 
traditional protection of Brazilian-made goods in 1990. In the 
early 1990s, just under 2 percent of farms occupied 54 percent 
of arable land, while 15 million campesinos (see Glossary) 
worked farms with fewer than 10 hectares of land. Of Brazil's 3 
million rural properties, only 58,000 account for about half the 
farmland. Moreover, about 42 percent of all privately owned 
land in Brazil lies idle. 

Rural unions claim that 12 million peasants are landless, a 
figure that is disputed by government officials. The Landless 
Movement (Movimento dos Sem-Terra — MST), now Brazil's 
most powerful, grass-roots movement, is leading a pressure 
campaign on behalf of the landless. The MST claims that 4.8 
million families have no land but want it and that Brazil has 
78.9 million hectares of fallow lands, properties that mostly 
belong to wealthy farmers who live in cities and use the land 
for tax write-offs. Land reform has been promised since colo- 
nial days, but has yet to take place. Sociologist Jose de Souza 
Martins has described the landless situation as the "conflict 
between archaic Brazil and modern Brazil." Since its establish- 
ment in 1980, the MST has resettled permanently 150,000 fam- 
ilies on land they originally occupied illegally. Led by more 
than 5,000 highly organized activists, the MST has 220,000 
members and some 4 million followers. It reportedly enjoys the 
moral support of up to 90 percent of Brazil's population. 



Ixxi 



In 1995 the MST stepped up its aggressive occupations of 
land. Encouraged by trade unionists, left-wing politicians, and 
even Roman Catholic clergy, thousands of campesinos have 
resorted increasingly to land invasions to obtain a parcel to 
farm. After the Military Police massacred nineteen landless 
activists in El Dorado de Carajas, in northern Para State, on 
April 17, 1996, the Cardoso government urged Congress to 
give priority to its agrarian reform measures. In addition, Presi- 
dent Cardoso created a new cabinet-level ministry, the Special 
Ministry of Agrarian Reform. The government claims to have 
given land to more than 100,000 families. Although Cardoso 
promised to award land to 280,000 families by the end of 1998, 
and some 60,000 families had been granted land by the end of 
1996, the Chamber of Deputies voted in May 1996 to halt his 
land-reform plans. Tension has continued to build in the many 
squatters' settlements in the countryside. 

The Cardoso government found itself at odds with the 
Roman Catholic Church in the first half of 1997 as a result of 
President Cardoso's complaint to Pope John Paul II in Febru- 
ary that Brazilian priests and bishops were actively abetting 
MST-organized land invasions. In late June 1997, Cardoso, 
exasperated with the MST, signed a decree making govern- 
ment land expropriations quicker and simpler but also penaliz- 
ing occupation of land by peasants. 

Landowners and miners have reacted violently to people 
who have gotten in their way. In Amazonia they have killed 
numerous peasants and rural labor leaders, including the 
renowned rubber tapper and rural union leader Chico 
Mendes, in 1988. Alarmed by the MST's activism, landowners 
have turned to hired guns (pistoleiros) and resurrected an orga- 
nization linked in the past with strong-arm tactics, the Ruralist 
Democratic Union (Uniao Democratica Ruralista — UDR). 
Apprehensive that the situation will only get worse unless there 
is an effective distribution of land, the military reportedly has 
been as anxious as the left to see rapid implementation of land 
reform. There has been intermittent violence resulting from 
land-reform problems, with much of it occurring in Para State. 
About 1,000 people were killed in land conflicts during the 
1985-95 period. 

Since Brazil's recession began to be felt in 1989, many rural 
workers have fallen victim to another form of violence — slavery 
practices, involving imprisonment for debt and coercion to 
prevent workers from leaving their employers. According to 



lxxii 



the Pastoral Land Commission (Comissao Pastoral da Terra — 
CPT), a nonprofit group sponsored by the Roman Catholic 
Church, documented cases of forced labor in Brazil, mostly tak- 
ing place on large estates called fazendas, rose from 4,883 in 
1991 to 25,193 in 1994. The actual figure is believed to be 
closer to 85,000. In November 1995, Brazil, the last Western 
nation to abandon slavery (in 1888), celebrated the 300th 
anniversary of Zumbi, a seventeenth-century Afro-Brazilian. 
Zumbi led raids to free slaves from sugar plantations for more 
than twenty years, using Palmares, a fortress in Alagoas State, as 
his base of operations. 

The huge, widening gap between Brazil's great potential and 
the reality of the large, poverty-stricken majority of its popula- 
tion has inspired national cynicism about the country's once- 
vaunted identification of its destiny with grandeza. During 
1992-94 Brazilians reportedly were beset with self-doubt, disil- 
lusionment, and frustration at their country's lack of progress 
and were concerned that their grand future would never 
arrive. "Brazil is the country of the future — and always will be" 
has been a familiar Brazilian aphorism since the early 1960s. 

Beginning with the economic crisis of the 1980s, many Bra- 
zilians, including scientists, already had given up on the Brazil- 
ian dream and moved abroad. In the second half of the 1980s, 
for the first time in the country's history, more people emi- 
grated from Brazil than immigrated to the country; many 
moved to Canada and the United States (Brazilian migrants to 
the latter totaled an estimated 332,000 by 1994). An estimated 
1 million Brazilians were living overseas by 1993. 

Entering the 1990s with GDP per capita income no higher 
than it was in 1980 and monthly inflation raging at an unprece- 
dented 30 percent, Brazilians were pessimistic about their eco- 
nomic future. Brazil was still squandering its riches, missing 
opportunities, and sinking deeper into misery. However, 
Fernando Collor de Mello (president, 1990-92) — young, ath- 
letic, and elegant — made Brazilians dream again with promises 
to make the country a developed world power through free- 
market policies that would bring inflation under control, cre- 
ate high economic growth, and attract foreign investment. 

The 1992 presidential corruption scandal and subsequent 
impeachment of President Collor delayed action on economic 
reforms. In September 1992, Brazil became the world's first 
democratic country to impeach its president on charges of cor- 
ruption. Collor's downfall reflected the endemic corruption 



lxxiii 



that was undermining Brazilian democracy in the early 1990s. 
The principal result of a poll taken by the Gallup Institute in 
March 1991 was that 78 percent of Brazilians surveyed in the 
major cities remained convinced that Brazil was still a para- 
dise — for corruption. The reputation of the judicial system was 
further undermined by Collor's acquittal on corruption 
charges. The crisis over Collor's impeachment nevertheless 
had a positive side. As President Cardoso explained in an 
address given in New York on October 23, 1995, it "clearly sig- 
naled the political maturity of a civic culture undergoing rapid 
consolidation." 

Collor's replacement, his vice president, Itamar Franco 
(president, 1992-94), a civil engineer by profession, was out of 
step with the short-lived Collor administration's reform 
agenda. Initiatives to redress fiscal problems, privatize state 
enterprises, and liberalize trade and investment policies lost 
momentum. The Franco government continued timidly along 
a free-market course, while inflation soared to 50 percent a 
month. By the end of his first year in office, Franco nearly 
reached the vndice vaia, or get-lost level, of unpopularity. 

The same Congress that ousted Collor on corruption 
charges became engulfed in its own graft scandal in late 1993. 
Judges, lawyers, government officials, and politicians were 
accused of conspiring in a US$1.2 billion scheme to defraud 
the social security system through inflated labor court settle- 
ments. In a poll taken in Rio de Janeiro in June 1993, respon- 
dents ranked Congress near the bottom (15 percent) of a list of 
Brazilian institutions that earned their trust; political parties 
had the least credibility (5 percent), while the military ranked 
near the top, with 58 percent. 

By the end of 1993, the National Accounting Court (Tribu- 
nal das Contas da Uniao — TCU) had investigated and found 
that 1,500 current and retired politicians were unfit to hold 
office, again because of corruption. A report produced by the 
Congressional Investigating Committee (Comissao Parlamen- 
tar de Inquerito — CPI) named nine firms that it said had 
defrauded the government systematically since 1985. The CPI 
claimed that fifty-five politicians were part of the secret cartel, 
as well as all the governors of the sixteen North and Northeast 
states, with the exception of Ceara's governor, Ciro Gomes. 

In December 1993, President Franco's fourth minister of 
finance, Fernando Henrique Cardoso, unveiled his controver- 
sial stabilization plan (Brazil's seventh since 1986), which 



lxxiv 



caused a furor over its proposal to raise taxes. Nevertheless, 
Cardoso accomplished an essential first step in implementing 
this plan, restoring order to public finances, and eliminating 
the estimated US$22.2 billion budget deficit (5 percent of 
GDP). Cardoso pressured Congress in February 1994 to pass a 
constitutional amendment setting up a US$16 billion Social 
Emergency Fund (Fundo Social de Emergencia — FSE), 
renamed the Fiscal Stabilization Fund (Fundo de Estabilizacao 
Fiscal — FEF), to be financed by tax increases. Official figures 
show how skewed the economy had become, thanks to the 
unbridled growth of bureaucracy. 

A few days after announcing his presidential candidacy on 
March 30, 1994, Minster of Finance Cardoso launched the 
third phase of his financial package, the Real Stabilization Plan 
(Piano Real). It consisted of three stages: the introduction of an 
equilibrium budget mandated by Congress; a process of gen- 
eral indexation (prices, wages, taxes, contracts, and financial 
assets); and the introduction of a new currency, the real, 
pegged to the dollar, on July 1, 1994. 

The legally enforced balanced budget would remove expec- 
tations of inflationary behavior by the vast public sector, which 
includes the national telephone company, many public utility 
companies, and several banks. By allowing a realignment of rel- 
ative prices, general indexation would pave the way for mone- 
tary reform. Through monetary and fiscal adjustments, the 
RealFlan succeeded in reducing inflation, which was ascending 
at a stratospheric rate of 7,000 percent a year, to almost 2 per- 
cent by that October. 

By September 1994, Cardoso had become the embodiment 
of Brazil's economic transformation. Cardoso's spectacularly 
successful Real Plan (which he coauthored with Pedro Malan, 
who later became his minister of finance) propelled him to a 
resounding presidential victory in the first round of the Octo- 
ber 3, 1994, election. Voters were forced to choose between a 
social democratic, free-market model of modernization and a 
reworked model of corporatist (corporatism — see Glossary) or 
syndicalist socialism. The former was advocated by Cardoso of 
the Brazilian Social Democracy Party (Partido da Social 
Democracia Brasileira — PSDB) and the latter by Luis Inacio 
"Lula" da Silva of the Workers' Party (Partido dos Trabal- 
hadores — PT) . Striking alliances to the right of his own PSDB, 
Cardoso marginalized the previously favored Lula. 



lxxv 



The 82.2 percent voter turnout for the 1994 presidential 
election was impressive (as compared with the United States). 
Cardoso, a former tucano (Sao Paulo) senator and minister of 
finance, placed first in every state except the Federal District 
and Rio Grande do Sul, where Lula, a grade-school dropout 
and long-time lathe operator, was victorious. Cardoso was aided 
by the support of not only the poor but also conservative par- 
ties, Sao Paulo industrialists, and the powerful media network 
of Rede Globo. In the congressional and gubernatorial elec- 
tions, all 513 seats in the lower house, the Chamber of Deputies 
(Camara dos Deputados), and fifty-four of the eighty-one Sen- 
ate seats were up for reelection. However, Cardoso supporters 
were deprived of a first-round victory in Sao Paulo, Minas 
Gerais, and Rio de Janeiro, where abstentions and spoilt or 
blank votes accounted for more than half the total. 

One of the most academically qualified presidents in history 
and a brilliant intellectual, Cardoso is a world-renowned sociol- 
ogist and the author of more than 100 monographs, including 
two dozen books, many of them written in English. In addition 
to Portuguese, Cardoso speaks English, French, Spanish, and 
several other foreign languages. His wife, Ruth Correa Leite 
Cardoso, is a leading Brazilian urban anthropologist who spe- 
cializes in studying community movements by women and 
blacks in Sao Paulo's favelas and who heads the Solidarity Com- 
munity (Comunidade Solidaria) social-action program. 

For most of his life, Cardoso was a university professor. He 
taught at the USP until 1964, when the new military regime 
persecuted him and banned him from teaching. He then chose 
to go into exile in Santiago, Chile, from 1964 to 1968. During 
that period, he coauthored, with Chilean sociologist Enzo Fal- 
etto, Dependency and Development in Latin America, considered 
one of the most influential interpretations of twentieth-century 
Latin American structural dynamics. It attributes Latin Amer- 
ica's underdevelopment to the once-influential doctrine that 
Cardoso cofounded, dependency theory (see Glossary), and 
the region's dependence on foreign capital and technology. 

Cardoso also taught in France at the University of Paris (the 
Sorbonne), Britain (Oxford), and the United States (Univer- 
sity of California-Berkeley, Princeton, Stanford, and Yale). In 
the 1970s, he became the best-known critic of the Brazilian 
nationalistic developmental model, which was based on the 
now obsolete strategy of state-led import-substitution industri- 
alization (see Glossary). In the early 1970s, when Cardoso dis- 



lxxvi 



tributed pamphlets outside factory gates, Brazilian business- 
men viewed him suspiciously as an unreliable leftist politician. 
Returning to Sao Paulo by the late 1970s, he established a think 
tank and entered politics in 1977. He served as a senator 
(1986-94), and, in 1988, helped to found the PSDB, a center- 
left party that opposed corruption. 

As the son, grandson, and nephew of generals, Cardoso 
retains strong ties to the military. His father, General Leonidas 
Cardoso, was elected deputy by the Communist Party of Brazil 
(Partido Comunista do Brasil — PC do B) in the 1940s and was 
persecuted by the military. President Cardoso's grandfather, 
General Mauricio Cardoso, was considered to have been the 
most brilliant officer of the Brazilian Army (Exercito 
Brasileiro). Fernando Cardoso's uncle, General Henrique 
Assuncao Cardoso, has been characterized as an extreme right- 
ist. In 1969 Cardoso himself was arrested, blindfolded, and 
interrogated by the military. 

After three civilian presidents of mediocre abilities, many 
Brazilians who had been despondent about their country's eco- 
nomic future viewed Cardoso's election as highly auspicious for 
Brazil, and most foreign observers agreed. Fellow sociologist 
Alain Touraine, a professor at the Maison des Sciences de 
l'Homme in Paris, commented to Est ado de Sao Paulo that 
Cardoso's election represented a victory of the future over the 
past at a moment in which the entire world is engaged in eco- 
nomic "globalization," a road that Brazil had rejected thirty 
years earlier. In addition to stabilizing the country economi- 
cally, Cardoso was expected to stabilize Brazil's erratic record of 
incomplete presidencies. Not a single democratically elected 
Brazilian president had completed his term of office since 
1926; the presidents either resigned, were forced from office, 
or, in one case (Getulio Dorneles Vargas, president, 1930-45, 
1951-54), committed suicide. 

By the time Cardoso assumed office on January 1, 1995, at 
age sixty-three, the monthly rate of inflation was less than 1 
percent, unemployment was low (about 5 percent), and Brazil 
had a comfortable and unprecedented level of foreign- 
exchange reserves, at a record US$40.8 billion, thanks largely 
to the influx of foreign capital into the local financial market. 
The conditions were favorable for essential reforms of the stat- 
ist economy, the bloated federal government, and the overgen- 
erous pension system. The latter had allowed privileged 
groups — teachers, airline pilots, soldiers, judges, journalists, 



lxxvii 



and politicians (politicians after only eight years) — to qualify 
for 100 percent pensions in their fifties (some at age forty-five 
on a pension 20 percent higher than their last wage) . One gov- 
ernor complained in October 1995 about a retired Military 
Police colonel who had accumulated twenty-six personal pen- 
sions and was drawing the equivalent of US$80,400 a month. 
By January 1995, the pension system was running an estimated 
annual deficit of 10 percent of GDP, or US$3 billion. 

Whereas the public sector's wages accounted for only 3 per- 
cent of GDP in 1980, the government in 1993 employed one- 
third of the total workforce and paid 11 percent of GDP in 
wages. In 1995 the federal bureaucracy's wage bill rose by 40 
percent, and states were spending 80 to 90 percent of their 
income on running the bureaucracy. The bloated bureaucracy 
is filled with thousands of nominal workers who receive salaries 
but do no work. The state governors, desperate to get thou- 
sands of civil servants off the state payrolls, have been Car- 
doso's most resolute allies in the battle for administrative 
reform and capping bureaucratic expenses at 60 percent of the 
government's revenues. However, privatization of state-owned 
companies is opposed by associations of civil servants reluctant 
to lose their privileges, particularly the officers (maharajas) in 
charge of state companies who are paid salaries (up to 
US$19,000 a month) that are high by Latin American corpo- 
rate standards. (In late 1995, there were 6,471 civil servants in 
seven states earning more than President Cardoso's salary of 
US$8,800 a month.) 

Cardoso's election also marked an ethical backlash to institu- 
tionalized corruption by traditional politicians, a reversal that 
began with the ouster of Collor. A report by government inves- 
tigators published on January 1, 1995, noted that corruption 
within the Brazilian government was costing the country about 
US$20 billion and accounting for 40 percent of the national 
investment budget. Cardoso refused to trade 20,000 to 30,000 
patronage jobs for congressional support, vowing to fill the 
jobs with qualified nonpoliticians to avoid corruption and to 
control spending. Cardoso's government sought to circumvent 
the corruption-ridden state and federal cronies by transferring 
most of the responsibility and funding of health, schools, and 
infrastructure to municipal authorities. Nevertheless, corrup- 
tion has remained entrenched in the bureaucracy. 

In his first 100 days in office, Cardoso was unable to deal 
effectively with the status quo forces in Congress, causing a fur- 



lxxviii 



ther loss of public confidence in democracy. A poll conducted 
in April 1995 indicated that the percentage of Brazilians prefer- 
ring democracy to any other form of government declined 
from 54 percent in the previous September to 46 percent, and 
the proportion regarding a dictatorship as better than democ- 
racy rose from 13 percent to 18 percent. 

In 1996-97 President Cardoso attempted to further reform 
the constitution in order to reduce the state's role in the econ- 
omy, revamp the federal bureaucracy, reorganize the social 
security system, redefine the federal-state relationship, simplify 
the tax system, and strengthen political parties. He succeeded 
in getting some major economic and political reforms enacted. 
Discarding the anticapitalist, theoretical nostrums that he had 
espoused during his academic career, he called for the imple- 
mentation of a sweeping market-oriented reform, including 
public-sector and fiscal reform, privatization, deregulation, and 
elimination of barriers to increased foreign investment. 

Cardoso's goals are to expand privatization measures, 
including elimination of constitutionally established monopo- 
lies. His initial economic reforms, adopted by the Congress in 
early 1995, permit the entry of foreign capital into previously 
exclusive areas, categorized as "strategic assets." These may 
include the oil extraction, mining, and telecommunications, 
and the banking, electricity, health, insurance, and retirement- 
plan sectors. Privatization sales in 1996 may have reached 
US$10.2 billion. On May 21, 1996, a consortium of Brazilian, 
French, and United States companies purchased a 34 percent 
share of the state-owned Power Services, Inc. (Servicos de Ele- 
tricidade S.A. — Light) in a transaction valued at US$2.2 billion, 
Brazil's then largest privatization. Cardoso administration offi- 
cials hoped the sale of Light would revitalize Brazil's often criti- 
cized, delay-prone privatization program. 

By April 1997, the government had sold fifty-five of 135 state- 
owned companies for a total of at least US$15 billion, since the 
inception of the program in 1991, including all of its steel com- 
panies. Most of those sales attracted little attention. 

In early May 1997, however, in Latin America's largest, most 
historic privatization to date, the government sold its 45 per- 
cent controlling stake in the Rio Doce Valley Company, Inc. 
(Companhia Vale do Rio Doce S.A. — CVRD) to a consortium 
led by Brazil's largest steelmaker, the already privatized 
National Iron and Steel Company (Companhia Siderurgica 
Nacional— CSN), for US$3.1 billion. Vale, as the firm is known, 



lxxix 



is the world's third largest mining company; it is the largest 
producer and exporter of iron ore (accounting for more than 
18 percent of the global market, or 100 million tons annually, 
with reserves of 4 to 5 billion tons) and Latin America's biggest 
producer of gold (eighteen tons a year). Vale is also Brazil's 
largest exporter (US$1.2 billion in overseas sales in 1996) and a 
symbol of Brazilian nationalism. In addition to its railroad sys- 
tem, which carries almost two-thirds of Brazil's rail freight, Vale 
owns two ports (Sao Luis and Vitoria). The government 
planned to sell its remaining 31.5 percent of ordinary shares in 
Vale, a company valued at US$11.7 billion, in late 1997. Some 
Brazilians protested the expected loss of Vale's tradition of pro- 
viding jobs and grants for cultural and other activities. 

Other giant state companies were slated for privatization, 
including Sao Paulo Power, Inc. (Eletricidade de Sao Paulo 
S.A. — Eletropaulo), which sells 15 percent of all of Latin Amer- 
ica's electricity, and Brazilian Electric Power Company, Inc. 
(Centrais Eletricas Brasileiras S.A. — Eletrobras), one of the 
world's top five power companies. Brazil's largest company, the 
Brazilian Petroleum Corporation (Petroleo Brasileiro S.A. — 
Petrobras), with sales of US$18 billion, is the world's fifteenth 
largest oil and natural gas company and a world leader in deep- 
sea drilling. Nevertheless, the inefficient Petrobras faced a pro- 
cess of accelerated deregulation in 1997 that may open the 
country's vast resources to joint exploration and development 
by foreign multinational oil companies. 

The opening of the telecommunications sector to foreign 
private investment capital actually will not become effective 
until the next government takes office in 1999. Under the Car- 
doso government's proposed new regulations, as approved by 
the Chamber of Deputies in May 1996, foreign private compa- 
nies would be permitted to purchase up to 49 percent in voting 
shares of state-owned telecommunications companies. Thus, 
new international joint ventures are changing the face of Bra- 
zil's long-introverted business world. The government 
expected to receive US$25 billion to US$30 billion from the 
privatization of telecommunications in 1997-99. 

The telephone business is one of the largest Brazilian indus- 
tries to be opened to foreign investors. In April 1997, in a move 
that was a precursor to the planned privatization in 1998 of the 
state-controlled telephone holding company, Brazilian Tele- 
communications, Inc. (Telecomunicacoes Brasileiras S.A. — 
Telebras), which could establish Brazil as a major destination 



lxxx 



for foreign investment, the government auctioned off the 
regional cellular foreign investment concessions for minimum 
prices totaling US$3.6 billion. In addition to electrical genera- 
tion and transmission companies, the government planned to 
sell banks, railroads, and the Rio de Janeiro Metro in late 1997. 

With its large and quite diversified economy, Brazil still has 
the potential to regain its former dynamism, despite the econ- 
omy's considerable structural and short-term problems. 
According to some economists, radical fiscal reforms are cru- 
cial to the consolidation of Brazilian economic stability and to 
lay the groundwork for self-sustained economic growth. The 
goals of these reforms are to redefine the scope of the Brazilian 
nation, its functional profile, and the extent of interaction with 
the private sector. Reducing the unsustainable disparities in 
income distribution is considered to be an essential compo- 
nent of overdue structural reforms. However, political factors 
have slowed the Cardoso administration's progress on vital 
structural reform. 

The RealFlan imposed a harsh new period of constricted 
profits and consolidation on Brazil's banks. The banking sec- 
tor, employing 960,000, began to downsize. In 1994-95 the 
Franco and Cardoso governments intervened in many banks 
and closed more than a dozen others. In August 1995, the Cen- 
tral Bank of Brazil (Banco Central do Brasil — Bacen; see Glos- 
sary) was forced to take over the giant Economic Bank (Banco 
Economico), Brazil's first private bank, based in the Northeast 
state of Bahia, after it ran up debts of US$3.6 billion. After his 
approval ratings and Brazil's stock market plummeted at the 
news of the federal bailout, Cardoso reversed course and 
instead sought to sell the bank to private investors. The Car- 
doso government also intervened to put the Sao Paulo State 
Bank (Banco do Estado de Sao Paulo — Banespa), which owed 
domestic and foreign lenders US$58 billion, under Central 
Bank control to save it from collapse and to put the Rio de 
Janeiro State Bank (Banco do Estado de Rio de Janeiro — Ban- 
erj) on the auction block. A US$12 billion government rescue 
package for private banks that was introduced in late 1995 laid 
the groundwork for a wave of mergers, privatizations, and liqui- 
dations. 

By the end of 1995, President Cardoso, by employing prag- 
matic, free-market economics, had led Brazil's inflation-prone 
economy to its greatest stability in a quarter century. Cardoso's 
continued popularity resulted in large part from his ingenious 



lxxxi 



handling of the economy. In the first twelve months of the new 
currency, the real and its associated fiscal measures brought 
strong growth, a flood of new investment, the creation of half a 
million new jobs, a temporary fall in unemployment, and an 
inflation rate of less than 25.9 percent a year. Nevertheless, the 
widening public deficit, combined with congressional resis- 
tance to the three reforms submitted by the Cardoso govern- 
ment in the second half of 1995 — administrative, tax, and 
social security reform — threatened to undermine Cardoso's 
Real Plan. In the view of Cardoso's critics, he missed his chance 
for radical reform of the state by failing to move aggressively at 
the outset of his administration. 

By 1996 Brazil's high public deficit (4 percent of GDP) from 
a rising public payroll, high interest rates, the mounting for- 
eign debt-service costs (US$15 billion in 1996) and amortisa- 
tions (US$18 billion), and the high level of social security 
payments were of increasing concern to investors. The cost of 
social security payments rose from US$25.4 billion in 1994 to 
US$32.9 billion in 1995. Social security showed a deficit of R$5 
billion in 1996. Some analysts have expressed concern that the 
deterioration of the fiscal situation at the same time that credit 
is being regenerated to restart the economy adds up to a dan- 
gerous combination, considering that the pace of structural 
reform has apparently slowed down. In this view, Brazil faces a 
volatile situation reminiscent of Mexico in 1994. Economist 
Sebastian Edwards contended in a Wall Street Journal op-ed on 
November 7, 1997, that "without immediate action on the fiscal 
side, the Real Plan may be unsustainable." Other analysts 
believe that the deficit problem looks worse than it really is. 

Cardoso's RealYXan succeeded in reducing inflation to 16.5 
percent in 1996, the lowest in nearly half a century, thanks to 
an overvalued currency. Brazilians began to take economic sta- 
bility for granted. However, since early 1996 some economists 
have warned that Brazil's exchange rate is too high. In June 
1996, economist Rudiger Dornbusch, who predicted the 1994 
Mexican peso crash, suggested that the raz/was overvalued by 
about 40 percent. In his analysis, which angered Brazilian offi- 
cials and instigated a debate, Brazil has been controlling infla- 
tion by means of a highly overvalued currency and high 
interest rates. Conservative economists led by Deputy Antonio 
Delfim Netto (PPB), a former minister of planning, called for 
accelerated devaluation. In the view of these skeptical econo- 
mists, the Cardoso government's economic policy dooms Brazil 



lxxxii 



to remaining the country of the future. By some estimates, the 
real in early 1998 was overvalued by 15 percent. Whether Brazil 
can continue to sustain a monetary and exchange-rate policy 
that is inconsistent with its large and growing budget deficits 
without a major devaluation remains to be seen. Some econo- 
mists expect a devaluation in 1998. 

For much of 1997, Brazil continued to enjoy its greatest sta- 
bility in three decades, with foreign reserves totaling US$57.5 
billion by May. However, the growing trade deficit, which 
reached US$10.93 billion in 1997, had become a top concern 
of the government. In 1997 the current account deficit rose to 
US$32.3 billion. Of the main Latin American economies, only 
Brazil in 1997 had a fiscal deficit as high as 3.4 percent of its 
GDP. 

Forced to choose between lower economic growth (esti- 
mated to be 3.2 percent in 1997) and a quick currency devalua- 
tion, which might aggravate inflation, Brazil's economic policy 
makers chose the former. In early November 1997, President 
Cardoso staved off financial speculators, who tried to force Bra- 
zil to devalue the real, by quickly raising interest rates and prop- 
ping up the raz/with billions of dollars in reserves. He then 
unveiled an economic austerity package that will include 
higher taxes and reduced government spending. By announc- 
ing a series of fifty-one drastic measures to bolster revenues by 
as much as US$18 billion, Cardoso demonstrated decisive lead- 
ership and a willingness to take tough measures to maintain 
confidence in the real To that end, his government won an 
important legislative victory on November 20 with the approval 
by the Chamber of Deputies of a key constitutional reform pro- 
posal to dismantle job protection for most civil service workers 
by giving the government new powers to dismiss them. The bill, 
which was expected to win approval in the Senate, would even- 
tually cost about 280,000 of 537,053 public servants their jobs, 
thereby eliminating a major impediment to the country's fiscal 
health. 

As a result of the 1996 municipal elections and strong oppo- 
sition by powerful vested interest groups, the Cardoso adminis- 
tration's more challenging reforms — administrative, social 
security, and fiscal — languished in Congress and awaited pas- 
sage in 1997. The opposition that Cardoso's bill to reform the 
deficit-ridden social security and pension systems encountered 
in Congress, among the state governors, and even in the 
Supreme Court has highlighted the constraints under which a 



lxxxiii 



Brazilian president operates. In January 1998, the Cardoso 
administration estimated that Congress would approve the 
social security bill by April. In addition to the social security bill 
and a new labor reform proposal, the Cardoso government 
resubmitted its proposed administrative and fiscal reforms to 
Congress. The lower house approved the basic text of the 
administrative reform on November 19, 1997. 

Despite congressional resistance to his reform proposals, 
President Cardoso further consolidated his power in early Feb- 
ruary 1997 when his candidates for the positions of speaker in 
both houses of Congress were elected. This led some observers 
to wonder whether the presidency was entering a de facto 
imperial era. Referring to "Emperor Cardoso," political analyst 
Villas-Boas Correia argued in a Jornal do Brasil article that no 
democratically elected president had ever accumulated so 
much power in Brazilian history. 

In January 1997, the Chamber of Deputies passed an amend- 
ment allowing for immediate reelection of presidents, gover- 
nors, and mayors. As a result of the Senate's approval of the 
amendment in June 1997, President Cardoso may stand for 
reelection in October 1998. His main opponent was Paulo 
Maluf, a right-wing populist and erstwhile presidential candi- 
date of the Brazilian Progressive Party (Partido Progressista 
Brasileiro — PPB), as well as the largest party in Congress, the 
Brazilian Democratic Movement Party (Partido do Movimento 
Democratico Brasileiro — PMDB). However, Maluf decided that 
Cardoso was still too popular to run against, so he entered the 
race for governor of Sao Paulo State instead. On November 30, 
1997, Luis Inacio da Silva announced officially that he will run 
for president on the Workers' Party ticket. But Cardoso's efforts 
to maintain a low rate of inflation, expand the economy, make 
progress in solving major socioeconomic problems, and reduce 
corruption and congressional immunity have lowered the left's 
chances of being elected to power in the October-November 
1998 presidential, congressional, and state elections. Cardoso's 
reelection is generally considered likely. 

Brazilian diplomacy had a landmark year in 1995 with Car- 
doso's assumption of office. The first former minister of for- 
eign affairs to be elected president of Brazil, Cardoso 
personally led Brazil's most important diplomatic initiatives in 
1995, bringing new credibility and respect to Brazilian foreign 
policy and the country's international relations profile. Having 
redefined Brazil's foreign policy objectives, the Cardoso gov- 



lxxxiv 



ernment improved Brazil's relations with the United States and 
adopted a more assertive role within the South American 
region. 

Brazil's priority in 1995-97 was to consolidate Mercosul 
(Common Market of the South) among Argentina, Brazil, Par- 
aguay, and Uruguay. In the four years before Mercosul took 
effect on January 1, 1995, regional trade almost tripled, reach- 
ing US$10 billion by the end of 1994, as compared with only 
US$3.6 billion in trade among the four full member countries 
in 1990. Exports to Mercosul countries accounted for 15 per- 
cent of Brazil's total in 1995, as compared with 13 percent in 
1994. Mean tariff rates were cut back from 32.2 percent in 1990 
to 14.0 percent in 1994, while at the same time the tariff ceiling 
was brought down from 105 percent to 40 percent. Trade 
between Brazil and Argentina in 1995 was US$10 billion, 
amounting to 80 percent of all trade within Mercosul and mak- 
ing Argentina Brazil's second largest trading partner, after the 
United States. 

In addition to removing trade barriers, Mercosul commits 
members to the coordination of policies on agriculture, indus- 
try, transport, finance, and monetary affairs. Argentina and 
Brazil see Mercosul primarily as a means of attracting foreign 
investment. Although Brazil's Mercosul partners were shocked 
when Brazil announced on March 25, 1997, its unilateral deci- 
sion to impose restrictions on imports, Brazil alleviated fears of 
a trade shutdown by allowing an exemption for Mercosul 
goods. 

Cardoso made a very successful state visit to Washington in 
April 1995. The Clinton administration welcomed Brazil's con- 
stitutional amendments opening up the Brazilian economy to 
increased international participation, especially the breaking 
up of state monopolies in the areas of petroleum and telecom- 
munications, but intellectual property rights remained at issue. 
Veja reported in mid-April 1995 that United States firms were 
losing US$800 million a year as a result of piracy by Brazilian 
companies. However, the Cardoso government subsequently 
modified Brazil's intellectual property rights law to coincide 
with stricter trademark and patent provisions. The new Patents 
Law, enacted in 1996, meets international standards. Neverthe- 
less, Brazil's software piracy rate was about 68 percent, account- 
ing for nearly seven of every ten computer software programs 
sold in the country, according to a Price Waterhouse study 
released in May 1997. During his official visit to Brasilia and 



lxxxv 



Rio de Janeiro in mid-October 1977, President Clinton empha- 
sized trade, education, and environmental issues and suc- 
ceeded in improving Brazilian-United States relations. 

Brazil's history has been relatively free from major conflict 
with its ten contiguous neighbors, with the main exception of 
the War of the Triple Alliance (1864-70) with Paraguay. In the 
twentieth century, Brazil has been a gentle giant; the only 
major power with which Brazil has fought a war was Germany 
in World War II. After the war, however, 1,500 Nazis, including 
the infamous Josef Mengele, moved to Brazil, according to the 
World Jewish Congress. Moreover, Rio de Janeiro's O Globo 
reported in early 1997 that President Vargas, a Nazi sympa- 
thizer, confiscated US$46 million in assets from Brazilian Jews 
in 1947. In April 1997, President Cardoso created a special 
commission charged with investigating Nazi assets. 

In the first half of the 1990s, Brazil's national security inter- 
ests were reshaped not only by the new, post-regime civil-mili- 
tary relationship, but also by Brazil's greatly improved 
integration with Argentina and other South American coun- 
tries through various security accords and a regional trade 
agreement, Mercosul. One of the Collor administration's most 
important national security actions aimed at the Brazilian 
Armed Forces (Forcas Armadas Brasileiras) was to expose the 
military's secret nuclear bomb program, the so-called Parallel 
Program (Programa Paralelo), and bring it under civilian over- 
sight and international monitoring. On December 13, 1991, 
Brazil reached a nuclear cooperation accord with Argentina, 
thereby accepting International Atomic Energy Agency (IAEA) 
safeguards. 

President Collor also implemented other significant 
national security measures. He continued to reduce defense 
spending to the lowest level in decades and allowed the coun- 
try's arms industry to collapse without any state intervention to 
sustain it. For example, the Collor administration announced 
that the Brazilian Aeronautics Company (Empresa Brasileira 
Aeronautica — Embraer), the producer of planes such as the 
Tucano trainer and the subsonic AMX jet, would be privatized. 
In an attempt to demilitarize the government and institute a 
more democratic governmental structure more likely to help 
improve relations with the United States, Collor abolished the 
military-dominated National Intelligence Service (Servico 
Nacional de Informacoes — SNI) and the National Security 



lxxxvi 



Council (Conselho de Seguranca Nacional — CSN) and formed 
the civilian-headed SAE (Strategic Affairs Secretariat). 

However, the Collor government's policies soon reverted to 
a more pragmatic approach that was more independent of the 
United States. Prior to Operation Desert Storm against Iraq in 
January 1991, Brazil found itself aiding the wrong side, with 
controversial arms sales, construction contracts, and transfer of 
missile technology to Iraq. Brazil subsequently altered its close 
commercial relationship with Iraq. 

In the second half of the 1990s, Brazil, strengthened by Mer- 
cosul, is evolving into a major intermediate regional power. 
Under Cardoso, Brazil has sought a more active international 
role, both in the UN and in bilateral relations. Traditionally, 
Brazil has played a leading role in collective security efforts and 
economic cooperation in the Western Hemisphere. For exam- 
ple, in early 1995 Brazil negotiated a cessation of border fight- 
ing between Ecuador and Peru. Cardoso believes that Brazil's 
international influence will be shaped by the extent to which 
regional cooperation in Latin America and the Caribbean, par- 
ticularly the South Atlantic, is strengthened. 

The Brazilian proposal for the creation of the South Ameri- 
can Free Trade Association (Area de Livre Comercio Sul-Amer- 
icana — ALCSA, or SAFTA), also known as the Free Trade Area 
of the Americas (FTAA), by 2005 is also an important step in 
Brazil's efforts to promote regional integration. At a May 13- 
15, 1997, meeting in Belo Horizonte of the thirty-four coun- 
tries participating in the FTAA, Brazil opposed the United 
States preference for a faster timetable than 2005 and bilateral 
negotiations instead of discussions among trading blocs, such 
as Mercosul and the North American Free Trade Agreement 
(NAFTA — see Glossary) . 

Cardoso also sees a need for Brazil to develop alliances, coa- 
litions, and partnerships on a global level, as distinct from a 
merely hemispheric level, be it with Asia, Europe, Africa, or the 
Middle East. The Cardoso government has focused on develop- 
ing dynamic trade partnerships with the European Union 
(EU — see Glossary), Japan, and China as a counterweight to 
United States dominance. Brazilian exports to China of agricul- 
tural products and byproducts grew by 46 percent in 1995. In 
dollar terms, the figures rose from US$226.4 million in 1991 to 
US$1.2 billion in 1995, an increase of 430 percent. 

In other national security areas, the Brazilian Armed Forces 
have been seeking a new role in the 1990s in the absence of any 



lxxxvii 



external threat to national security. They no longer have their 
two traditional "enemies": Argentina and communism. Since 
ending their regime in March 1985, the armed forces have con- 
tinued to assert themselves politically under civilian rule. Their 
political influence, however, has diminished under the 1988 
constitution, which places them under presidential authority, 
while the policy-making influence of the presidency, Congress, 
and civilian ministries has grown. In the absence of a defined 
security policy and a common project, the armed forces have 
been mired in bureaucratic rivalry. 

Brazil's defense budget in 1997 totaled US$12 billion. The 
IBGE reported that investment in the armed forces as a per- 
centage of the government budget declined sharply from 9.03 
percent in 1985 to 1.70 percent in 1995. Not only is Brazil 
spending proportionately little on the military, some critics 
have argued, but the money is being spent badly and is being 
used to maintain an archaic and top-heavy bureaucracy. In the 
early 1990s, the army proportionately had more generals (164, 
of whom 141 were on active duty) than the United States Army. 
Critics have also singled out as "wasteful" the funds spent for 
the construction of a nuclear submarine, scheduled to be 
launched by 2007 at a cost of US$2.2 billion. 

Brazil's new National Defense Plan (Piano de Defesa Nacio- 
nal — PDN), approved on November 7, 1996, rules out "all pos- 
sibilities" of conflict with Argentina. The PDN states that areas 
of future possible conflict are linked with "drug trafficking, 
narcoterrorism, and the presence of armed groups in Amazon 
regions bordering other countries." However, the "security and 
development" school of military thinking of a new generation 
of military strategists at the War College (Escola Superior de 
Guerra — ESG) disagrees with this threat assessment. It sees 
poverty and inequality as the main destabilizing influences. 

The Clinton administration hoped that Brazil would signifi- 
cantly improve its efforts to stem international drug smuggling 
across its territory from Andean neighbors. The Amazon has 
become an international drug-trafficking route in the 1990s, 
and Brazil has become a major cocaine exporter. Increasingly, 
smugglers have been sending small shipments hidden in lug- 
gage or riverboat cargo. Under a new cooperation agreement 
signed in April 1995, the Clinton administration expected Bra- 
zil to improve coordination with the United States Drug 
Enforcement Administration (DEA). Stressing the threat posed 
by drug trafficking to Brazilian national security, President Car- 



lxxxviii 



doso announced on April 17, 1996, that the armed forces 
would join the drug enforcement effort in border areas, in the 
Northeast, and in the Amazon region. Mafia groups are gain- 
ing strength in Brazil. Nearly fifty Mafia kingpins were living in 
Brazil by mid-1997, either in Rio de Janeiro or Sao Paulo. Brazil 
had become the Italian Mafia's third area of activity, after Italy 
itself and the United States. 

Brazil is becoming the largest market for money laundering 
in the world, according to the Federal Police (Policia Federal) 
and Ministry of Justice. The Cardoso government calculated in 
1996 that some US$490 billion evade taxes every year as a 
result of money laundering. In mid-1996 the government sub- 
mitted a bill to Congress containing measures to combat 
money laundering. 

Within Brazil, national sovereignty over the Amazon region 
has been a continuing security concern of the military, as evi- 
denced by two projects: the Amazon Region Surveillance Sys- 
tem (Sistema de Vigilancia da Amazonia — Sivam) and the 
Amazon Region Protection System (Sistema de Protecao da 
Amazonia — Sipam). The Sipam and its sensor component, 
Sivam, involve superimposing a state-of-the-art surveillance sys- 
tem that will, by 2000, monitor 5 million square kilometers of 
the Amazon. It will transmit digital data from satellites, fixed 
and airborne radars, and other high-tech sensors (to be built 
under the Massachusetts-based Raytheon Company's US$1.4 
billion contract with the Brazilian government) to computer- 
ized processing centers and hundreds of "user-nodes" dis- 
persed throughout the Amazon region. 

The concept of ecological security in regions such as the 
Amazon has become a major national security interest for Bra- 
zil. In the Cardoso government's view, the Sivam and Sipam 
projects are examples of how technology can be applied to res- 
cue neglected regions. Sivam, which is coordinated by the Min- 
istry of Aeronautics and the SAE (Strategic Affairs Secretariat), 
is promoted as an environmental initiative, with emphasis on 
the protection of the Amazon region, such as the monitoring 
of illegal logging and mining, forest burning, and even incur- 
sions into indigenous reserves. The system will be used to 
demarcate boundaries and monitor the use of Indian reserva- 
tions, national parks, and other preserves. In addition to col- 
lecting ecological data, Sivam will monitor migration and 
settlement. 



lxxxix 



However, Sivam was conceived as a military project related to 
the development of an air traffic control network. Thus, Sivam 
will eliminate a radar blind spot for commercial airlines and 
facilitate the policing of illegal flights, estimated at as many as 
3,000 daily. These illegal flights involve the smuggling not only 
of drugs, but also of consumer goods and ores. Most attention 
is focused on the 722 kilometers of the Brazilian-Colombian 
border, an area where most clandestine flights by drug traffick- 
ers take place. 

The Sivam, which was signed in May 1995, was bogged down 
in the Senate throughout 1995 and much of 1996 amid objec- 
tions over the cost, United States involvement, and allegations 
of influence peddling by a top aide to President Cardoso, 
whom the president subsequently fired. Ultimately, thanks to 
the personal intervention of President Cardoso and lobbying 
by the United States, the Raytheon Company's first financial 
contract with the Brazilian government to build Sivam was 
signed in October 1996. Raytheon signed Sivam contracts with 
two Brazilian firms on March 14, 1997. 

Despite its efforts to monitor the Amazon region, one 
record set by the Cardoso administration has been in destruc- 
tion of the Amazon rain forest. Deforestation in the first three 
years of the Cardoso administration reached 60,257 square 
kilometers, an area almost twice the size of Belgium. On Janu- 
ary 26, 1998, Brazil's INPE (National Institute of Space 
Research), which is headquartered in Sao Jose dos Campos, 
released its report on deforestation of the Legal Amazon (the 
nine states in the North and Center-West regions), showing a 
declining trend in 1996-97 from a record level set in 1995. The 
new INPE figures, based on Landsat satellite images, show that, 
contrary to the government's claims that deforestation had 
slowed during 1992-97, the destroyed area in 1995 was 29,059 
square kilometers of rain forest, the largest annual deforesta- 
tion total recorded since the satellite monitoring began. The 
1995 figure represented more than a doubling of the deforesta- 
tion recorded in 1994 (14,896 square kilometers) and a rate 
even greater than that during the 1970s. The 1996 figure was 
well below the 1995 rate, but still a total of 18,161 square kilo- 
meters, an area almost as large as Israel, disappeared that year. 
The projection for 1997 is 13,037 square kilometers destroyed. 

Another significant study, entitled The Use of Fire in Amazonia: 
Case Studies Along the Arc of Deforestation, was released in October 
1997 by the Woods Hole Research Center in Massachussets and 



xc 



its newly established research center, the Institute of Environ- 
mental Research on Amazonia (Instituto de Pesquisa Ambien- 
tal da Amazonia — IPAM), based at the Federal University of 
Para (Universidade Federal do Para — UFPa) in Belem. This 
report found that cutting and burning have dried out the for- 
est to the point that it could burn out of control. 

On January 28, 1998, the Chamber of Deputies approved an 
environmental crimes bill to grant the "federal environmental 
agency" legal authority to enforce environmental protection 
laws. The "federal environmental agency" refers to the Brazil- 
ian Institute for the Environment and Renewable Natural 
Resources (Instituto Brasileiro do Meio-Ambiente e dos Recur- 
sos Naturais Renovaveis — Ibama), which is under the Environ- 
mental Affairs Coordinating Secretariat (Secretaria de 
Coordenacao dos Assuntos do Meio Ambiente — SMA) of the 
Ministry of Environment, Hydraulic Resources, and the Legal 
Amazon. The bill, which had languished in Congress for seven 
years, provides criminal penalties for damaging the environ- 
ment and grants the "federal environmental agency" the right 
to levy fines, prosecute polluters, and order companies to cor- 
rect environmental hazards. 

Environmentalists supported the legislation, which includes 
significant provisions requiring companies to pay the cost of 
cleaning up environmental damage that they are proven to 
have caused (up to R$50 million), prohibiting proven polluters 
from signing government contracts, and setting daily fines for 
companies that refuse to clean up their damage. Although 
President Cardoso on January 30 disputed the results of the 
INPE's Brazilian Amazon Deforestation Appraisal Program 
(Programa de Avaliacao do Desflorestamento da Amazonia 
Brasileira — Prodes), he signed the new Environmental Crimes 
Law on February 12. The president vetoed ten articles, includ- 
ing penalties for noise pollution, traditional slash-and-burn 
agricultural burnings, and automatic liability of companies to 
clean up their environmental damage and compensate victims. 
The watered-down law takes effect in April 1998. 

Since the early 1990s, Brazil has actively sought to develop 
nonproliferation credentials. In September 1991, it signed the 
Mendoza Declaration prohibiting chemical and biological 
weapons. On February 9, 1994, Brazil began addressing inter- 
national missile proliferation concerns by establishing a civilian 
space agency, thus ensuring that Brazil's space projects are 
exclusively peaceful. In addition, on May 30, 1994, Brazil finally 



xci 



ratified the 1967 Treaty for the Prohibition of Nuclear Weap- 
ons in Latin America (Treaty of Tlatelolco). Brazil was one of a 
half-dozen countries in the world that had not signed the 1968 
Non-Proliferation Treaty (NPT). However, on June 20, 1997, 
President Cardoso submitted a request to Congress asking it to 
approve Brazil's adherence to the NPT 

In an attempt to overcome its reputation for transferring 
missile and nuclear technology to countries such as Iraq, Brazil 
signed the Missile Technology Control Regime (MTCR — see 
Glossary) in October 1995, committing itself to abide by the 
MTCR guidelines. Brazil hoped to convince MTCR members — 
such as the United States, France, the United Kingdom, and 
Germany — that Brazil can be trusted with sensitive technology. 

Brazil's space program since 1991 has been restricted to cre- 
ating satellite launchers for scientific and commercial pur- 
poses. Unlike Argentina, Brazil was able to join the MTCR 
without having to abandon its program for the development 
and construction of its Satellite Launch Vehicle (Vefculo 
Lancador de Satelite — VLS). Production of the VLS got under- 
way in May 1996. With MTCR membership, Brazil could reach 
new agreements with Germany, for example, in the field of 
space and nuclear technology cooperation and produce and 
export long-range rocket equipment and technology. However, 
Brazil's fledgling space program suffered a setback on Novem- 
ber 2, 1997, when controllers were forced to destroy the rocket 
that was to carry the nation's second Data Gathering Satellite 
into Earth's orbit to collect information on the environment. 

During then United States Secretary of State Warren Chris- 
topher's visit to Brazil on March 1, 1996, the Cardoso govern- 
ment reaffirmed Brazil's new attitude of partnership and 
cooperation with the United States. On that occasion, United 
States and Brazilian officials signed a new bilateral agreement 
for cooperation in space that emphasized the use of space tech- 
nology for environmental research and analysis. Officials of 
both countries also pledged to cooperate in protecting the 
Amazon rain forest. In addition, a United States-Brazil Agree- 
ment for Cooperation on Peaceful Uses of Nuclear Energy was 
adopted. 

The Cardoso government articulated a strategic vision of 
Brazil's future. This vision, as explained by Ronaldo Mota 
Sardenberg, secretary of the SAE, recognizes that the new 
world order is based on knowledge, communications technol- 
ogy, and services; Brazil must insert itself into the international 



xcii 



community and South America by reducing social inequalities, 
increasing national integration, and emphasizing science and 
technology. Thus, the Cardoso government sees strategy as a 
long-term socioeconomic concept to overcome underdevelop- 
ment. It believes that Brazil will not maintain its status as a mid- 
dle-income nation, much less climb into the developed world, 
if a large proportion of its population is excluded and entire 
regions of the country continue to be underdeveloped. 

To better prepare Brazil for the strategic information needs 
of the twenty-first century, President Cardoso charged the SAE 
with collecting economic and political information and focus- 
ing on detecting social conflicts that could occur during his 
presidency. Cardoso also proposed the establishment of the 
Brazilian Intelligence Agency (Agenda Brasileira da Inteligen- 
cia Nacional — ABIN), an autonomous organization also under 
the Office of the Presidency. The ABIN is expected to replace 
the former SNI apparatus in 1998. 

The new ministry of defense to be established by Cardoso in 
1998 will merge the four military ministries. The current mili- 
tary ministries will be reduced to commands. The commanders 
of the army, air force, and navy will be directly subordinate to 
the minister of defense. The new ministry's budget for 1998 
totalled 2.9 billion reals, almost US$3 billion, making it the 
third largest budget in the government. Sardenberg was 
expected to become the supervisor of the incumbent military 
ministers, thereby undermining the decision-making power of 
the military. 

Cardoso succeeded in repairing Brazil's international image 
to reflect an economically and politically stable and reliable 
country that can achieve its development potential, compete 
for new markets, attract productive investment, and acquire 
foreign technology. He also appeared to have restored Brazil- 
ians' self-esteem and national pride. According to the results of 
a Vox Populi poll, reported in January 1996, a majority of peo- 
ple (2,000) questioned said they believed Brazil was well on its 
way to becoming a great power. In addition, 84 percent 
expressed pride in being Brazilian, and 79 percent said they 
had no wish to emigrate. 

Brazil's 160 million inhabitants and rich resources make it a 
country of tremendous potential. Realization of Brazil's poten- 
tial, however, will depend on implementation of the needed 
administrative, social, and tax reforms. According to a 1997 
study by the University of Sao Paulo, their passage would result 



XClll 



in annual GDP growth of 7 percent. By late 1997, little real 
progress had been made in the areas of health, education, 
homelessness, land squatting by rural peasants, transportation, 
and so forth. Nevertheless, Cardoso's Piano Real has aided the 
poor more than any other social class, raising their standards of 
living and their spirits by giving them greater purchasing power 
(as well as debts) and a sense of upward mobility. Although 
Brazil, with annual inflation of 7.2 percent in 1997, is clearly on 
a steadier course than it was in the first half of the 1990s, the 
country still has a long way to go in reversing the ever-widening 
socioeconomic inequities between rich and poor. Many regard 
Cardoso as the last, best hope for Brazil (at least in this cen- 
tury) to take the actions needed to get the country to realize its 
enormous potential and its destiny in the twenty-first century. 



February 13, 1998 

* * * 

In the early months of 1998, rampant drug-trafficking and 
destruction of the Amazon rain forest rose to the forefront of 
threats facing Brazil. The country's drug trafficking and other 
drug-related crime have expanded much more rapidly and 
insidiously than the capability of Brazilian society to perceive 
the threat. Three laws enacted in late February 1998 demon- 
strate the higher priority to be accorded by the Cardoso gov- 
ernment to drug enforcement. First, President Cardoso 
ordered the creation of the Special Secretariat for National 
Drug-Control Policy (Secretaria Especial da Politica Nacional 
do Controle de Drogas — SEPNCD), directly subordinate to the 
presidency of the republic. The SEPNCD will give priority to 
border surveillance and control and coordinate the activities of 
state and local security agencies with fourteen federal agencies 
that combat drugs. It will also develop strategies and national 
policy on drug control. Second, Cardoso signed a newly passed 
money-laundering law, which will create mechanisms to iden- 
tify "dirty money" and set prison terms of three to five years for 
money laundering. And third, Cardoso signed a law authoriz- 
ing government agencies to shoot down hostile aircraft. 

In the second half of March 1998, fires brought on by the 
worst drought in memory and queimadas (burnings) by slash- 
and-burn farmers swept Roraima, destroying vast swaths of 



xciv 



savanna and the rain forests that were home to the Yanomami 
Indians. Roraima is the state with the lowest population density 
in Brazil (one inhabitant per square kilometer), but it has the 
largest indigenous community in the country, with about 14 
percent of the nation's native American population. The con- 
flagration was the worst in the history of the Amazon Region, 
according to the National Institute of Amazon Region 
Research (Instituto Nacional de Pesquisas da Amazonia — 
INPA). Indeed, in the assessment of the United Nations (UN) 
representative in Brazil, Walter Franco, the fires constituted an 
environmental disaster unprecedented on the planet. They 
consumed more than 36 million hectares, or 33,000 square 
kilometers, an area larger than Belgium and constituting 15 
percent of Roraima's territory. Although the Brazilian military 
rejected a UN offer to help combat the fire as an intrusion into 
Brazil's sovereignty, the Cardoso government accepted it. 

April 13, 1998 

* * * 

In the largest conservation step ever in the Amazon, on April 
29, 1998, President Cardoso committed Brazil to tripling the 
area of Amazon forests under formal government protection 
by 2000. The agreement, to be carried out with the financial 
and technical assistance of the World Bank (see Glossary) and 
the World Wildlife Fund, would turn 10 percent of the Brazil- 
ian Amazon, or 25 million hectares, into parks and preserves. 

May 1 1 , 1 998 Rex A. Hudson 



xcv 



Chapter 1. Historical Setting 




A nineteenth-century wood carving made by an indigenous Brazilian tribe, 
from Hjalmar Stolpe, Amazon Indian Designs from Brazilian and Gui- 
anan Wood Carvings 



EXPORTS, SLAVERY, AND PATRIARCHY have been the three 
constants of Brazilian history. The export orientation of the 
colonial economy shaped Brazil's society. Even the name "Bra- 
zil," like the country itself, is suggestive of commerce and the 
pursuit of wealth. Brazil's name derives from the brazilwood 
trees from which Europeans sought in the sixteenth century to 
make valuable red dyes. However, the central fact of the coun- 
try's history was the exploitation of cheap labor, first as slaves, 
then as wage-earners. Indeed, Brazil's history is the story not 
only of conquest but also of the enslavement of its native peo- 
ples and of millions of imported African slaves. 

Brazil's history can be divided into five economic periods, 
each characterized by a dominant export product. The first 
period, from 1500 to 1550, involved the logging of brazilwood 
along the coast of the Northeast (Nordeste). Brazilwood was 
the source of a red dye important to the expanding textile 
industry of sixteenth-century northern Europe, particularly 
Normandy and Flanders. The trees and the ready labor of the 
natives, who were eager to acquire metal products in return for 
cutting and hauling logs to the coast, attracted Portuguese and 
French ships. The French were quite successful because they 
sent young men to reside among the natives, to learn their lan- 
guages, and to get them to bring the timber to the nearest bay 
or estuary. By contrast, the Portuguese, in the first few decades, 
traded from their ships or haphazard outposts. The Portuguese 
attempted to use the factory system that they were then 
employing along the African, South Asian, and Asian coasts. 
This system consisted of fortified trading posts that had mini- 
mal contact with the local population. The French, with deeper 
roots among the native peoples and more knowledge of their 
cultures, filled their waiting ships more quickly. France's activ- 
ity convinced the Portuguese crown to undertake sustained set- 
tlement to protect its claim. 

The Europeans struggled among themselves for control of 
the beachheads, anchorages, and bays. The Portuguese effort 
to gain effective control of the coast coincided with the onset 
of the sugar era, which extended from 1530 to 1650. Sugarcane 
cultivation was carried out in widely separated tidewater 
enclaves from Sao Vicente in the South (Sul — the present-day 
states of Parana, Santa Catarina, and Rio Grande do Sul) to 



3 



Brazil: A Country Study 

Pernambuco in the Northeast; it became most successful 
around the Bahian Reconcavo and in Pernambuco. Enslaved 
natives and increasingly, after the 1560s, imported African 
slaves provided the labor for the mills (engenhos) and fields. 

Sugar tied Brazil into the developing system of European 
capitalism, imposed a patriarchal social system on the country, 
and prompted Dutch attacks on Portugal's South Atlantic 
empire. The sugar economy's need for oxen and meat led to 
the accompanying growth of cattle raising in the dry interior 
hinterlands, known as the sertdo. Cattle raising became so 
important to the economy and to the development of the inte- 
rior as to almost constitute a phase in its own right. However, 
although cattle raising provided hides for export, it supplied 
principally local markets. The Dutch seizure of Recife in 1630 
and their subsequent capture of Luanda on the Angolan coast, 
a principal source of slaves imported into Brazil, disrupted the 
Portuguese dominance over sugar. When the Hollanders 
(holandeses) withdrew from Brazil in 1654, they stimulated cane 
growing on the Caribbean islands and used their control of dis- 
tribution in Europe to reduce Portuguese access. 

The third period — mining of gold and diamonds from the 
1690s to the 1750s — carried Portugal's effective occupation of 
the land far into the interior of what are now the states of 
Minas Gerais, Goias, and Mato Grosso. The discoveries of allu- 
vial gold on the Rio das Velhas in about 1693, throughout cen- 
tral Minas Gerais in the next years, and out into Mato Grosso in 
1718 and Goias in 1725, and then the growth of diamond min- 
ing along the Rio Jequitinhonha in Minas Gerais after 1730, 
shifted the colonial center away from the Northeast coast into 
the interior. Minas Gerais became the new jewel in Portugal's 
crown, although one that was difficult to keep in place. As 
more people spread to the distant interior, many of them were 
living beyond the reach of royal officials. Indeed, one of Bra- 
zil's distinctive features has always been the existence of people 
who live within the boundaries of the country but outside the 
limits of the society and the controls of the state. 

The Northeast and the South were tied to Minas Gerais via 
the livestock trade. The mineiro (Minas Gerais) towns needed 
beef, as well as a seemingly endless supply of mules. Without 
good roads, mule trains became characteristic of the region, 
which was soon tied together by an extensive web of trails. The 
cattle came south from ranches along the Rio Sao Francisco, 
thereby linking the mines to the Northeast. The mules came 



4 



Historical Setting 



from the pampas of Rio Grande do Sul via the market at Soro- 
caba in Sao Paulo, tying the South to the mining region. 
Because Paulistas (residents of the state of Sao Paulo) made 
most of the initial gold strikes, Sao Paulo was connected to all 
the mining areas. The importance of Minas Gerais and the 
mines farther inland led the crown to transfer the viceregal 
capital from Salvador, Bahia, to Rio de Janeiro in 1763. 

Gold production declined in the later decades of the eigh- 
teenth century, and from about 1820 coffee cultivation pro- 
vided a fourth period that lasted to the end of the 1920s. It 
began in the mountains behind Rio de Janeiro, moved along 
the Rio Paraiba Valley to the west across Sao Paulo State and 
out into Parana. Coffee powered the rise of Sao Paulo and its 
port of Santos, and although it gradually took a secondary posi- 
tion to industrialization after the late 1930s, Brazil remained 
the world's major coffee producer. 

The Amazon had an important era of its own from the 1880s 
to 1919, when it was the world's major source of rubber. The 
rubber boom drew world attention to the region, prompted 
Brazil to secure its boundaries, and lured thousands of rubber 
tappers from the drought-plagued sertdo of the Northeast to the 
forests of Acre. It turned into a bust when the helter-skelter col- 
lection of wild rubber lost out to the massive production meth- 
ods of British, Dutch, and French plantations in Southeast Asia. 

The fifth period began in the 1930s with import-substitution 
industrialization (see Glossary) and extended into the 1990s. 
Industry's initial and heaviest concentration was in the triangle 
of Sao Paulo-Rio de Janeiro-Belo Horizonte. The period was 
perhaps best symbolized by the steel mills of Volta Redonda, 
built in 1944, and Sao Paulo's integrated industrial zone. Indus- 
trialization and its parallel urbanization attracted rural 
migrants from throughout the country, but especially from the 
drought-plagued Northeast. In the space of a generation after 
1940, Brazil leaped from the age of the bull-cart to that of the 
internal combustion engine, changing the national map in the 
process. 

Before the 1930s, despite the earlier incursions into the inte- 
rior, Brazil still consisted of a series of enclaves connected by 
sealanes rather than by railroads or paved highways. Pan Amer- 
ican Airway's introduction of the DC-3 on its run from Belem 
to Rio de Janeiro in 1940 vaulted Brazil directly into the air 
age. By the 1970s, it had the world's third largest commercial 
air fleet after the United States and the Soviet Union. The 



5 



Brazil: A Country Study 

1950s push to develop an automotive industry was followed in 
later decades by large-scale construction of long-distance high- 
ways, which by the 1980s made it possible to travel to all regions 
of the country on paved roads. Symbolic of this era was the 
building of Brazil's third capital at Brasilia (1955-60) on the 
plains of Goias. The internal combustion engine and the coin- 
ciding growth of the petroleum industry also made possible the 
mechanization of agriculture, which changed rapidly the face 
of the Brazilian west and made Brazil the second largest 
exporter of food in the 1980s. The combination of highways 
and automotive transport opened up Amazonia for the first 
time. The construction of the highway corridors from Brasilia 
to Belem and from Cuiaba to Porto Velho to Manaus triggered 
large-scale migration, mining and agricultural development, 
timbering, land disputes, displacement of native peoples, and 
massive deforestation. The latter made Brazil's Amazon policies 
the subject of world debate, which in turn made Brazilians 
worry about the security of their immense North region 
(Amazonia). 

The Indigenous Population 

In 1500 Pedro Alvares Cabral's fleet, which was en route to 
India, landed at Porto Seguro in what is now the state of Bahia. 
The territory that comprises modern Brazil had a native popu- 
lation in the millions, divided among hundreds of tribes and 
language groups. Their ancestors had lived in this land for as 
long as 30,000 years. There is no way to be certain of the exact 
size of the population or its distribution. Many areas that were 
inhabited in 1500 were later stripped bare by epidemics or 
slave hunters. But scholars have attempted to make estimates 
based on contemporary reports and the supposed carrying 
capacity of the land. For Brazil's Amazon Basin alone, demog- 
rapher William M. Denevan has suggested 3,625,000 people, 
with another 4,800,000 in other regions. Other estimates place 
5 million inhabitants in Amazonia alone. More conservatively, 
British historian John Hemming estimated 2,431,000 people 
for Brazil as a whole. These figures are based on known tribes, 
although many unknown ones probably died out in the devas- 
tating epidemics of the colonial era. 

Certainly, the indigenous population exceeded that of Por- 
tugal itself. The early European chroniclers wrote of multi- 
tudes along the coast and of dense populations in the Amazon 
Basin. Far from being awed by the newcomers, the indigenous 



6 



Historical Setting 



inhabitants displayed curiosity and hospitality, a willingness to 
exchange goods, and a distinct ability at aggressive defense. 
However, they could not prevent the devastation caused by the 
diseases carried by the Europeans and Africans. Tens of thou- 
sands succumbed to smallpox, measles, tuberculosis, typhoid, 
dysentery, and influenza. Whole peoples were likely annihi- 
lated without having had direct contact with Europeans as dis- 
ease was carried along the indigenous trade routes. 

The Indians spoke languages that scholars have classified 
into four families: the Ge speakers, originally spread along the 
coast and into the central plateau and scrub lands; the Tupi 
speakers, who displaced the Ge on the coast and hence were 
the first met by the Portuguese; the Carib speakers in the north 
and in Amazonia, who were related distantly to the people who 
gave their name to the Caribbean; the Arawak (or Aruak) 
speakers in Amazonia, whose linguistic relatives ranged up 
through Central America to Florida; and, according to sociolo- 
gist Donald Sawyer, the Nambicuara in northwestern Mato 
Grosso (see Language, ch. 2). These were not tribes but lan- 
guage families that comprised many language groups. Numer- 
ous tribes also spoke languages unrelated to any of the above. 
Warfare and migrations carried peoples from these linguistic 
families to various parts of Brazil. The Europeans took advan- 
tage of the cultural differences among the Indian peoples to 
pit one against the other and to form alliances that provided 
auxiliary troops in their colonial wars. 

Portugal viewed the Indians as slave labor from the outset. 
When Portugal began its imperial ventures, it had a population 
of about 1 million. Indeed, in the mid-sixteenth century Portu- 
gal's population was so sparse that much of its territory was 
uncultivated and abandoned. African and native Brazilian 
slaves were common on the streets of Lisbon. Portugal's colo- 
nial economy in Brazil was based on slavery. Initially, the Portu- 
guese bartered with the natives to bring brazilwood and other 
forest items to the coast. However, when the natives had accu- 
mulated all the tools and pots that they needed, they showed a 
lack of interest in continuing the arrangement. Consequently, 
the Portuguese turned to violent persuasion. The enslavement 
of the natives shaped much of the history that followed. 

Just as Indian unrest had aided the Spanish conquerors of 
Mexico and Peru, so too did the Portuguese profit from arriv- 
ing at a time of turmoil. The Tupi speakers had been shifting 
steadily from the south in a massive migration to coastal areas, 



7 



Brazil: A Country Study 

displacing the resident Ge speakers, many of whom moved into 
the interior. This population shift had triggered continuous 
warfare against non-Tupi peoples and against Tupi subsets. It 
involved set battles that arrayed hundreds and, in some 
reports, thousands of warriors in fierce hand-to-hand combat. 
Some of the fighting went beyond struggles over control of 
land or resources to vendettas in which captives were sought 
and in some cases reportedly cannibalized. The Portuguese 
used these vendettas to keep the Indians from uniting against 
them and subsequently to obtain slaves. The conquest of Brazil 
was not a simple toppling of an organized empire as in Peru, 
but a drawn out, complicated process that spread over huge 
distances, different peoples, and centuries. Thus, it is not sur- 
prising that the Brazilian elites developed myths about racial 
harmony, peaceful change, and compromise that often have 
colored the interpretations of historians, thereby distorting 
understanding of Brazil's past. 

Just as Portugal was different from the rest of Europe, so too 
would Brazil be different from the rest of the Americas. Portu- 
gal was both an agrarian and a maritime monarchy that used its 
control over land grants to discipline the nobility and its issu- 
ance of trading licenses to attract local and foreign investment 
in its overseas ventures. As merchant-king, the monarch super- 
vised an economic system that imported timber, sugar, and 
wine from Madeira and the Azores, gold from the Guinea 
coast, spices from India, and dyewood and forest products, 
then sugar, gold, gems, and hides from Brazil. These products 
were then reexported to Europe. 

The Portuguese established themselves on the Brazilian 
coast in their drive to control Europe's trade with India and 
East Asia. They secured "title" to what became eastern Brazil in 
their attempted division of the world with Spain in the Treaty 
of Tordesillas (see Glossary) of 1494. During the next centu- 
ries, the Portuguese, Spanish, French, English, and Dutch 
changed the South American continent's trade patterns, which 
previously had been focused internally. Seeking profits, the 
Portuguese marshaled Indian labor to provide exportable 
products. The commercial objective that initially had 
prompted overseas operations became the first principle of 
Portuguese colonization. Brazil was not to be a place where 
Europe's religious dissidents sought freedom of conscience. 
Rather, to paraphrase historian Caio Prado Junior, the coloni- 
zation of tropical Brazil would be "one vast commercial enter- 



8 



Historical Setting 



prise." Colonial Brazil's reason for being was to supply 
dyewood, sugar, tobacco, eventually gold and diamonds, cot- 
ton, coffee, and later rubber for the European and then world 
markets. The externally oriented colonial economy consisted 
of enclaves that faced seaward and that considered only their 
own commercial interests. 

In his 1843 essay, "How the History of Brazil Should Be Writ- 
ten," Karl Friederich Philipp von Martius urged the study of 
the three basic racial groups — indigenous peoples, Europeans, 
and Africans — to obtain a clear understanding of the country's 
history. Yet when he discussed the interactions between the 
Indians and the Portuguese, he wrote that the former were 
only a few primitive tribes and that the "colonies developed 
and expanded almost without caring about these Indians." 
Although he could not have been more wrong, historians have 
echoed his attitude repeatedly. The natives, rather than being 
few, were in the millions, and the Portuguese determination to 
exploit their labor shaped frontier expansion and set Brazil's 
modern boundaries. 

The Colonial Era, 1500-1815 

Frontier Expansion That Shaped Brazil 

Under the Treaty of Tordesillas, everything to the east of the 
line that ran from pole to pole 370 leagues west of the Cape 
Verde Islands was to be Portugal's to exploit. The exact reason 
for Portugal's interest in having the line so far to the west is 
debatable, but the Portuguese may have been trying to keep 
the Castilians away from the sure route to the East. Very practi- 
cally, the line's placement gave Portuguese vessels en route to 
India ample room to pick up winds and currents that took 
them around the southern end of Africa, a feat carried out by 
Vasco da Gama on his voyage of 1497-99. The Portuguese also 
may have known that western lands or islands lay on their side 
of the line. On the modern map of Brazil, in the north the line 
cuts across the eastern end of the Ilha de Marajo, and in the 
south it passes through Laguna on the coast of Santa Catarina. 
Because most of present-day Brazil lies to the west of the line, 
clearly the Portuguese expanded successfully on this initial divi- 
sion. 

The territorial aggrandizement, which is one of the main 
themes of Brazilian history, was both accidental and a matter of 
state policy. Uncertainty as to the detailed geography of South 



9 



Brazil: A Country Study 

America persisted into the twentieth century, so it is 
understandable that Portuguese officials professed to believe 
into the eighteenth century that the estuaries of both the 
Amazon and the Rio de la Plata were on their side of the 
Tordesillas Line. The two river systems were, in the words of 
the Jesuit Father Simao de Vasconcellos, "two keys that lock the 
land of Brazil . . . two giants that defend it and demarcate 
between us [Portuguese] and Castille." Several centuries of 
penetration along these river systems gave Brazil its distinctive 
shape. It could be said that today's Brazil owes its vast territory 
to the native Indians who served as skilled trackers, warriors, 
porters, food suppliers, and paddlers for the Portuguese 
expeditions, and to the Indians whose potential as slaves lured 
the Portuguese inland. 

The Portuguese empire at the outset was a commercial 
rather than a colonial one. Portugal lacked sufficient popula- 
tion to establish colonies of settlers throughout its maritime 
empire. The Portuguese practice was to conquer enough space 
for a trading fort and a surrounding enclave from which to 
draw on the wealth and resources of the adjacent country. A 
map of this maritime commercial domain would show a series 
of dots connected by sealanes rather than continuous stretches 
of territory. French competition forced the Portuguese shift to 
colonialism in Brazil. This shift involved the gradual move 
from trading for brazilwood to cultivating sugarcane, which 
required control of great expanses of land and increasing num- 
bers of slaves. The first to burst past the Tordesillas Line were 
the slave hunters. The shift to colonialism was also facilitated 
by the union of the Spanish and Portuguese crowns between 
1580 and 1640. Although the two governments on the Iberian 
Peninsula and in the Americas were kept separate, trade and 
travel controls became lax. An active contraband trade devel- 
oped between Brazilian settlements and Buenos Aires, and Por- 
tuguese moving overland appeared in Asuncion, Potosf, Lima, 
and even Quito. 

Expansion along the Atlantic coast had been gradual. Using 
the model of the Atlantic islands, the crown in 1536 divided the 
Brazilian coast into fifteen donatory captaincies (donatdrios) . 
To induce settlement, the crown offered ten leagues of coast- 
line as personal property, a percentage of the dyewood trade, 
control over trade of enslaved natives, as well as the exclusive 
right to build mills. In 1580 Brazil comprised the area from 
Pernambuco in the north to Sao Vicente in the south. With 



10 



A view of Morretes, Parana State, with the Pico do Marumbi in the 

background 
Courtesy Jon Barlow Hudson 

Spanish assistance thereafter, the Portuguese expanded north 
to Paraiba, then west through Ceara and Maranhao against the 
natives and the French, until they founded Belem in 1616. 
Beginning in 1621, these possessions were divided into the 
state of Maranhao (embracing the crown captaincies of Ceara, 
Maranhao, and Para) and the state of Brazil, centering on Sal- 
vador, Bahia. The reassertion of Portuguese independence 
under the Bragancas in 1640 led to sporadic conflict in frontier 
areas and to policies seeking to hold back Spanish advances. In 
the Amazon and Rio de la Plata river basins, the Spanish rather 
than the Portuguese had been first on the scene. The Span- 
iards included Alvar Nunez Cabeza de Vaca, who journeyed 
from the coast of Santa Catarina to Asuncion in 1540, and 
Francisco de Orellana, who descended the Amazon in 1542. 

The most important Spanish advances were the mission set- 
tlements, where the Jesuits Christianized native peoples. Two 
areas of particular importance lay adjacent to the river systems 
that delimit Brazil in the south and in the north: the Parana- 
Paraguay Basin in the south and the Mamore-Guapore Basin in 
the north. From 1609 to 1628, the Jesuits founded eight mis- 
sions among the Guarani peoples between the Parana and 



11 



Brazil: A Country Study 

Paraguai rivers in what is now southern Paraguay. They pressed 
deep into what is today the state of Parana, between the Ivai 
and Paranapanema rivers, to establish fifteen more in what was 
called Guaira Province. 

From 1629 to 1631, the Guaira missions were attacked by 
slave hunters, known as bandeirantes (see Glossary), from the 
Portuguese town of Sao Paulo. According to the governor of 
Buenos Aires, these attacks resulted in the enslavement of 
more than 70,000 Guaranf. Consequently, the Jesuits decided 
to evacuate some 10,000 survivors downriver and overland to 
sites between the Rio Uruguai and the Atlantic, in what became 
the state of Rio Grande do Sul. Other Jesuits fleeing the Guaira 
missions set up missions among the Itatfn people on the east- 
ern bank of the Rio Paraguai in what is now Mato Grosso do 
Sul, only to be destroyed brutally by bandeirantes in the 1630s 
and 1640s. By 1650 only twenty-two of forty-eight missions 
remained in the whole region. The Jesuits stopped the slave 
hunters in the south by arming and training the Guaranf, who 
dealt a significant blow to their oppressors in the Battle of Mbo- 
rore in 1641. This victory ensured the continued existence of 
the southern Spanish missions for another century, although 
they became a focal point of Portuguese-Spanish conflict in the 
1750s. Broadly speaking, the Battle of Mborore stabilized the 
general boundary lines between the Portuguese and the Span- 
ish in the south. 

In the north, the Spanish had established the town of Santa 
Cruz de la Sierra in 1561 and from there planted missions in 
the Mamore-Guapore Basin in about 1682. Called the Mojos 
and Chiquitos, these mission provinces were in what is now low- 
land Bolivia fronting on the states of Mato Grosso and 
Rondonia. By 1746 there were twenty-four mission towns in the 
Mojos and ten in Chiquitos. The bandeirantes again carried the 
flag of Portugal into the region, first attacking the Chiquitos 
missions for slaves and then discovering gold in Mato Grosso 
(1718-36). Unsure where these gold discoveries were in rela- 
tion to the Spanish territories, the members of the Lisbon- 
based Overseas Council, which administered the colonies, 
ordered a comprehensive reconnaissance and the drawing of 
accurate maps. In 1723 Francisco de Melo Palheta led an expe- 
dition from Belem to the Guapore, reporting to Lisbon the 
startling news about the numerous prosperous Jesuit missions. 
Moreover, the question of fixing borders had become more 
urgent in 1722, when a respected French cartographer placed 



12 



Historical Setting 



the mouths of the Amazon and the Rfo de la Plata on the Span- 
ish side of the Tordesillas Line. 

Because the Guapore rises in Mato Grosso and flows into the 
Mamore, which enters the Madeira, and then into the Amazon, 
these rivers formed a natural border. Moreover, the headwaters 
of the Paraguai were close and offered the possibility of linking 
the Amazonian and La Plata systems. In 1748 Lisbon created 
the Captaincy of Mato Grosso as its rampart on the Peruvian 
side and later in the century erected Fort Principe de Beira on 
the Guapore. In northern Amazonia, in what were then the 
royal states of Maranhao and Para, the Portuguese, worried 
about Dutch traders from Guiana (modern Suriname) and 
Spaniards from Venezuela, built fortifications at Obidos, 
Manaus, Tabatinga, and on the Rio Branco and Rio Negro dur- 
ing the eighteenth century, thereby solidifying their claims. As 
it turned out, it was easier to secure the vast North region than 
it was the South. 

In 1680 the Portuguese had built a fort at Colonia do Sacra- 
mento on the eastern La Plata shore opposite Buenos Aires to 
guard their claim and to capture a share of the contraband 
trade with silver-rich Potosf. According to the Overseas Coun- 
cil, Lisbon adopted the policy of fortifying and settling the 
coast below Santa Catarina, because "the continuation of these 
settlements will be the best means of deciding the question of 
limits . . . between the two crowns.!' 

By the mid-eighteenth century, the Iberian powers were 
ready to admit the fiction of Tordesillas and to redraw their 
lines in South America on the basis of uti possidetis (that is, own- 
ership by occupation rather than by claim). The Portuguese 
gave up Colonia do Sacramento, and in return received the 
lands of the Jesuit order's seven missions in western Rio 
Grande. This exchange led to the Guaranf War of 1756, which 
destroyed the missions and contributed to the Jesuit expulsion 
from Portuguese (1759) and Spanish (1763) possessions. With 
the Treaties of 1750, 1761, and 1777, Brazil took on its modern 
shape. The lines were drawn for the nineteenth-century strug- 
gles over the East Bank (Banda Oriental, or present-day Uru- 
guay) of the Rio Uruguai and the Rfo de la Plata, the war with 
the United Provinces of the Rfo de la Plata (1825-28), and the 
Paraguayan War, also known as the War of the Triple Alliance 
(1864-70). 

Thus, as a result of slave hunting, gold prospecting, and Por- 
tuguese royal policy, the Tordesillas Line became obsolete, and 



13 



Brazil: A Country Study 

Portugal obtained more than half of South America. When 
Brazil became independent in 1822, its huge territory was com- 
parable in size with the Russian and Chinese empires. 

Early Colonization 

On April 22, 1500, the thirteen-ship fleet under Pedro Alva- 
res Cabral anchored off the mouth of the Rio Buranhem 
(sweet bark in Tupi) on the Bahian coast. The chronicler of 
the discovery, Pero Vaz de Caminha, wrote that immediately 
they saw men walking on the beach, and by the time a longboat 
reached the shore twenty or so had assembled. Entirely naked 
and dark skinned, they laid down their bows and arrows as a 
sign of peace, while responding to offers of Portuguese hats by 
giving over a parrot-feathered headdress and a long string of 
white seed pearls. Thus did the cultural exchange begin that 
would evolve over the next five centuries into the distinctive 
Brazilian culture. 

In the nine days that the Portuguese stayed at the anchorage 
they called Porto Seguro, the natives were fascinated by the 
Catholic Mass, the iron tools, and alcoholic drink. Their seem- 
ing receptivity and lack of religious symbols that the Portu- 
guese could understand caused Caminha to predict that these 
people quickly would turn Christian. 

The natives helped fill a ship with fine-grained timber, dye- 
wood, and presumably some of the buranhem wood or bark that 
gave the river its name. Cabral sent the ship back to Lisbon 
with Caminha's oft-quoted letter to the king, the first report on 
Brazil to reach Europe. As the rest of the fleet set sail from what 
Cabral called the Island of Vera Cruz for the Cape of Good 
Hope, two male convicts were left on the shore. Rather than 
execute such degredados (outcasts; see Glossary), the Portu- 
guese were instinctively creating an advance guard that would 
learn the local language and via intermarriage would give 
them in another generation the means to penetrate both the 
indigenous societies and the Brazilian land mass. 

After so many years of remarkable contacts with newly dis- 
covered lands, the Portuguese were a bit blase about the news 
of this land of parrots, naked people, and brazilwood. At that 
time, peppers, spices, and silks were worth more than such 
exotica, and those products came from India and lands farther 
east. 

With the exception of the New Christian (Jewish converts) 
investors, Brazil received little attention from Lisbon for three 



14 



Historical Setting 



decades. The investors scouted and defended the coast and 
shared with the crown their monopoly contracts to harvest the 
brazilwood. The Portuguese monarchs followed the practice of 
holding legal title to lands and to certain commodities but issu- 
ing to others licenses to profit from these lands and commodi- 
ties at their own expense, or with the backing of other 
investors. The custom was akin to the Castilian practice of 
adelantado (awarding of conquistador status — see Glossary) 
that developed during the reconquest of the Iberian Peninsula 
from the Moors, whereby the crown commissioned an agent to 
conquer a certain area at his own expense in return for rights 
to land, booty, and labor. The combination of royal licenses 
and private initiative that worked so well for Portugal along the 
African coast and in India was reshaped for Brazil. 

But soon other Europeans were challenging Portugal's 
claims to exclusivity. Spanish captains edged their ships down 
the coast and up the Rio de la Plata. From 1504 onward, 
French vessels from Brittany, Flanders, and Normandy were 
active in the dyewood trade. The reddish-purple dyes made 
from the wood brought good prices from tapestry and textile 
makers, and the French court ignored Portuguese protests. 
The Portuguese sent out naval expeditions to destroy French 
vessels and outposts, but by 1530 it was clear that mounting an 
effective coast guard along thousands of kilometers with count- 
less coves, anchorages, and bays would be impossible; Portugal 
either had to take active possession or lose out to more inter- 
ested rivals. Portugal took two steps, one immediate and the 
other long term. It dispatched a strong fleet under the com- 
mand of Martim Afonso de Sousa, who was instructed to clear 
the coast of interlopers and to establish a permanent settle- 
ment. The result was Brazil's first European town, Sao Vicente, 
established in 1532. 

The crown also may have wanted to follow up on the adven- 
ture in 1524 of Aleixo Garcia, a Portuguese shipwrecked on the 
southern coast who led about 2,000 Guarani on a raid against 
Inca border towns in what is now Bolivia. Sousa sent a govern- 
ment-sponsored expedition (entrada) back over Garcia's route, 
only to meet death at the hands of the Carijo tribe of Indians. 
Such feeble results did little to attract investors, so the crown 
turned to the hereditary donatory captaincy system that had 
succeeded on the islands of Madeira and the Azores. Under 
this system, each donee was responsible for colonizing his own 
captaincy at his own expense. To help the lord proprietor 



15 



Brazil: A Country Study 

attract settlers, he was given permission to issue land grants 
(sesmarias) . This step was significant because it twisted a medi- 
eval Portuguese practice that placed conquered lands in the 
hands of peasants into one that gave some families holdings 
larger than Portugal's provinces. This practice in part led to the 
establishment of latifundia (see Glossary) in Brazil. 

Nonetheless, the nobles were not interested in risking their 
lives or fortunes in a land of "naked savages," and most of those 
who received the grants were too ill-prepared, ill-financed, and 
ill-connected to succeed. The northern four captaincies never 
went beyond the planning stage, and the rest flourished or 
failed depending on the management skills and competence 
of the donatdrio in dealing with the native Brazilians. Sousa, 
who obtained the grant to Sao Vicente, prospered because he 
took advantage of Joao Ramalho, a castaway who had married 
the daughter of the chief of the Goiana Tupiniquin. Because of 
Ramalho, who lived until 1580, the Portuguese were able to 
obtain Indian labor, foodstuffs, and women. With his help, it 
was possible to establish a town at the village of Piratininga, 
which in time would grow into the metropolis of Sao Paulo. He 
was the key player in the Portuguese alliance with the Tupin- 
iquin, who protected the colony from other Indians and who 
formed the basis for the future military power of the bandei- 
rantes. The lack of European women facilitated assimilation 
and acculturation with the Indians. With the steady miscegena- 
tion, a substantial population of Tupi-speaking mestizos (mes- 
tizos or mamelucos — see Glossary) came into being. 

Also important for Sao Vicente's success was Sousa's ability 
to attract investors for sugar mills, including an investor from 
Antwerp, which became the center of the European sugar mar- 
ket. Although Pernambuco in later years surpassed Sao Vicente 
in sugar production, its early success fixed Portuguese control 
on what centuries later would be the agricultural and industrial 
core of Brazil. 

Similarly, the affluence of Pernambuco Province centering 
on Olinda resulted from successful interaction with the natives, 
the ability to draw investment capital (often from Italian mer- 
chants), and capable settlers. The donatdrio, Duarte Coelho 
Pereira, had married into the well-connected Albuquerque 
family, which helped him attract colonists and financial sup- 
port to set up sugar mills. But he was especially fortunate 
because his brother-in-law, Jeronimo de Albuquerque, had 
married the daughter of chief Arcoverde (Green Bow) of the 



16 



Historical Setting 



Tobajara, thereby sealing an alliance that gave the Portuguese 
supplies of food and workers. The alliance also gave Coelho 
Pereira the military superiority to eventually defeat the French 
and their Indian allies. As the brazilwood stands were cut down, 
they were replaced with sugarcane plantations, which by 1585 
were served by more than sixty mills or engenhos. The captaincy 
was so successful that there was reputedly more luxury in Per- 
nambuco than in Lisbon. This strong beginning would make it 
the northern focal point of Portuguese America. 

Porto Seguro failed to prosper as a captaincy. The constant 
fighting with the local Aimore people may have been related to 
the presence of many married Portuguese couples and, conse- 
quently, little intermarriage with the natives. Likewise, Bahia 
failed at this stage because its donatdrio lacked managerial skills. 
Many of the Portuguese there were veterans of India, where 
abuse of the natives was routine. The Tupinamba finally tired 
of the mistreatment, and many of the Portuguese at Bahia, 
including the donatdrio, were captured and ceremonially killed 
and eaten. Ilheus, Espirito Santo, Sao Tome, Santo Amaro, and 
Santa Anna also failed because of poor management and hos- 
tile relations with the natives. The coast was now exposed to 
French incursions. 

Such an outcome was not what the crown had in mind, and 
it decided wisely to listen to warnings. Rather than replace 
inept donatdrio >5 with others, the king established direct royal 
control, except over Pernambuco and Sao Vicente. The crown 
may have acted at this juncture for several reasons: the Spanish 
discovery of the famed silver mountain at Potosi (1545), the 
decline of the Asian spice trade, and the crown's practice of 
reclaiming royal control after some years of leasing its rights. 
The enhancement of royal power was part of the general Ibe- 
rian pattern of establishing royal control over the sprawling 
colonial ventures. In a larger sense, renewed royal control 
appears to have been linked to a new conservatism in Catholic 
Europe. The Council of Trent (1545-63) defined church 
dogma and practice, religious tolerance faded, and the Inquisi- 
tion was emplaced in Portugal in 1547. 

The king named Tome de Sousa the first governor general 
of Brazil (1549-53). He ordered Sousa to create a capital city, 
Salvador, on the Bahia de Todos os Santos (Bay of All Saints) 
and to spread the royal mantle over the captaincies, defending 
the weaker ones and reestablishing the failed ones. Because 
Indian attacks were blamed for the failures, Sousa's orders 



17 



Brazil: A Country Study 



amounted to a declaration of war on the indigenous peoples of 
Brazil. If they could be defeated, the French would have no 
allies and so would be less of a threat. In addition, Sousa was to 
increase royal revenues. The twin objectives of control and rev- 
enue were characteristic of royal policy for the rest of the colo- 
nial era. 

Bahia, as the city and province would be known, was selected 
for its central location and its fine bay, and because the crown 
had purchased it from the heirs of the donatdrio. Sousa built 
fortifications, a town, and sugar mills. His knottiest task was 
forming a policy on the Indians, whose status remained 
unclear. Although he had treasury and coast guard officials 
with him, their roles were oriented toward Portuguese colonists 
and European interlopers. 

As early as 1511, the crown had placed the Indians under its 
"protection," and it ordered Sousa to treat them well, as long as 
they were peaceful, so that they could be converted. Conver- 
sion was essential because Portugal's legal claims to Brazil were 
based on papal bulls requiring Christianization of the Indians. 
However, those who resisted conversion were likened to Mus- 
lims and could be enslaved. In fact, as historian Sergio Buarque 
de Holanda showed, by identifying Brazil as a destination of 
the wandering Apostle St. Thomas the Portuguese settlers were 
able to argue that all natives had their chance to convert and 
had rejected it, so they could be conquered and taken captive 
legitimately. Thus, a distinction was made between peaceful, 
pliable natives who as wards deserved crown protection and 
those resisters who wanted to keep their independence and on 
whom 'just war" could be made and slavery imposed. 

The dual mission of the governors was contradictory; how 
could they stimulate the economy using slave labor while con- 
verting the natives? To carry out the pacification and conver- 
sion of the natives, the crown chose the new Jesuit order of the 
Society of Jesus, which was international in membership and 
military in structure and which had the task of defending and 
spreading the Catholic Counter-Reformation. The Jesuits had a 
major impact on Brazil, despite their small numbers — 128 by 
1598. The Indians responded to the Jesuits with initial accep- 
tance, then regression, evasion, and enmity. The objective of 
the Jesuits was to Europeanize the Indians by resettling them in 
Indian villages (aldeias). In a recurring pattern, the first aldeia 
near Bahia (1552) soon disintegrated as the Indians who sur- 



18 



1 



The Lacerda elevator 
connecting the Upper City 
( Cidade Alta) with the Lower 
City ( Cidade Baixa), 
Salvador, Bahia State 
Courtesy Jaklen Muoi Tuyen 




vived the European-born diseases faded into the interior 
beyond the Jesuits' reach. 

Europeanization was overcome by a sort of Brazilianization, 
as the Jesuits blended Indian songs, dances, and language into 
the liturgy and as the colonists adopted native foods, women, 
language, and customs. However, the first bishop of Brazil 
(1551), Dom Pero Fernandes Sardinha, objected to the Jesuit 
accommodation with indigenous culture. He threw the weight 
of his authority behind subjugation and enslavement. At issue 
was the nature of the future of Brazilian society. The bishop, 
who had served in Goa and ironically had taught Ignatius Loy- 
ola, the Jesuit founder, insisted that Europeanization must pre- 
cede baptism. He believed Brazil, like India, should have a dual 
society made up of heathen natives ruled by a small number of 
Portuguese. 

The conflict between the Jesuits and the bishop had far- 
reaching significance for Brazil's future. To get away from his 
direct grasp, the Jesuits shifted their attention to the south, 
where they formed, in 1554, the aldeia of Sao Paulo de Piratin- 
inga on the plateau at the headwaters of the Rio Tiete high 
above Sao Vicente. Father Jose de Anchieta's mission village 
later became known as the city of Sao Paulo. The crown seem- 
ingly favored the Jesuit approach because it recalled Bishop 



19 



Brazil: A Country Study 



Sardinha. En route back, Sardinha was shipwrecked and then 
killed and reportedly eaten by Caete people. 

In 1557 the crown sent out a new bishop and a new governor 
to consolidate royal control and to bring organization to the 
far-flung settlements on the verge of collapse. The new crown 
representatives supported Jesuit methods and returned the 
Jesuits to Bahia. By protecting the Indians who lived in aldeias 
from enslavement, the crown representatives made the Jesuit 
towns more attractive. The pool of slaves available to the colo- 
nists dwindled, causing such protests that Mem de Sa (gover- 
nor, 1558-72) approved a 'just war" against the Caete to punish 
them for killing Brazil's first bishop. However, the "just war" 
soon got out of hand as the closer and undefended aldeias were 
raided for slaves. The conflict damaged native trust in the mis- 
sions, and the epidemics of influenza, smallpox, and measles in 
1562 and 1563 decimated the Indian population and increased 
colonist competition for laborers. The famine that followed the 
waves of disease prompted starving Indians to sell themselves 
or their relatives in order to survive. 

This situation led to a policy under which the Indians were 
considered free but could be enslaved in a sanctioned "just 
war," or for cannibalism, or if rescued from being eaten or 
enslaved by other natives. Government-sponsored expeditions 
(entradas) into the interior, sometimes ironically called rescues 
(resgates), became slave hunts under the guise of 'just war." The 
Paulista expeditions (bandeiras), one of the major themes of 
Brazilian history in the 1600s and 1700s, would develop out of 
this practice. The eventual exploitation of the interior and the 
development of gold and gem mining in Minas Gerais, Goias, 
and Mato Grosso have roots in the voracious appetite of coastal 
plantations for slave labor. 

As Indian resistance, social disintegration, and flight into the 
interior increased in the last quarter of the sixteenth century, 
the Portuguese began to import more African slaves. In 1570 
there were 2,000 to 3,000 such slaves in Brazil; by 1587 there 
were 14,000. Considering that the European population in 
1570 was 20,760 and in 1585 was 29,400, the growth of African 
slaves from 14 percent of the number of whites to 47 percent is 
striking. Much of the commentary on native slavery holds that 
the Indians were unfit physically to be slaves, when actually it 
was their strong resistance to slavery and the colonial competi- 
tion for their labor that led to the African slave trade. Also, the 
focus of many historians on Bahia and Pernambuco has left 



20 



Historical Setting 



readers with the impression that Indian slavery gave way to 
African slavery throughout Brazil by 1600. This was not the 
case. Indians continued to be enslaved in Para, which caused 
the depopulation of much of Amazonia by the mid-eighteenth 
century. 

French and Dutch Incursions 

In addition to dealing with labor supply, Mem de Sa, who 
was the consolidator of Portuguese Brazil, dealt successfully 
with the French threat. The French had continued to attack 
Portuguese shipping and to maintain interest in a permanent 
colony. Noting that Rio de Janeiro's Guanabara Bay had not 
been occupied, Vice Admiral Nicolas Durand de Villegaignon, 
a French navigator, led a mix of Huguenots and Catholics there 
in 1555 to establish a colony, France Antarctique, on Ilha de 
Sergipe. After a decade, his Utopian dream of finding a reli- 
gious refuge for Protestants and Catholics failed. Despite their 
good relations with the Indians, the French could not with- 
stand the Portuguese assaults that began in 1565. That year, to 
ensure future control of the bay, Mem de Sa founded the city 
of Rio de Janeiro, which became the second royal captaincy. 
Expelled from Guanabara Bay in 1567, the French turned their 
efforts to the northern coast. They made alliances with the 
Indians and settled themselves on Ilha Sao Luis do Maranhao 
in 1612, where fierce fighting led to their expulsion in 1615. 
They kept active north of the Amazon delta, maintaining 
claims to Amapa. 

By 1580 the Portuguese had overcome French threats and 
most indigenous resistance to their command of key ports. At 
this point, a more profound Spanish threat appeared with the 
passing of the crown of Portugal to King Philip II of Spain. This 
event had immediate and long-range consequences. Now 
Europe's two greatest empires were united under a single ruler 
and could well have been joined permanently, save for the 
determination of the Portuguese to maintain their identity. 
The Iberian union gave the Portuguese easier access to the 
Spanish domains. For Brazil, however, the most important 
result was that it made enemies of Portugal's former business 
associates, the Dutch. Portugal's commerce was more open 
than Spain's and perhaps more practical. Portugal recognized 
its need for shipping and for access to markets, both of which 
the Dutch provided for Brazilian sugar. The spirit of coopera- 
tion faded with the union of the crowns as the Dutch, long 



21 



Brazil: A Country Study 

struggling for independence from the Spanish Habsburgs, 
were shut out officially from the Portuguese domains. This 
exclusion led to the formation of the Dutch West India Com- 
pany in 1621 and the seizure of Brazilian sugar lands. After 
being unsuccessful in holding Salvador in 1624-25, the Dutch 
captured Pernambuco in 1630 and eventually extended their 
sway from the Rio Sao Francisco to Sao Luis do Maranhao until 
finally being forced out in 1654. 

The Dutch incursion was the longest and most serious chal- 
lenge to Portuguese control by a major maritime power. The 
struggle to drive out the Dutch had devastating effects on the 
sugar plantations and sugar mills. The Dutch, particularly Gov- 
ernor Johan Maurits, Count of Nassau, had worked to build 
good relations with the Portuguese planters in the interior, sup- 
plying them with credit, slaves, merchandise, and European 
markets. Nassau encouraged religious tolerance, constructed 
buildings and canals in the style of Amsterdam, and brought in 
artists, engineers, and scientists to embellish, record, and study 
the local flora, fauna, and peoples. 

Portugal and its Brazilian subjects had divergent interests in 
responding to the Dutch. When the Duke of Braganca took the 
throne as Joao IV in 1640, his government faced the determi- 
nation of Philip IV to reconquer Portugal, and he therefore 
needed to maintain peace with the rest of Europe. As much as 
the Portuguese economy needed the revenues from the sugar 
trade, the court had to face the reality that in Europe the 
Dutch dominated a good portion of that trade. Thus, if Por- 
tugal attacked Dutch-held Pernambuco, it would earn an 
enemy in Europe and lose access to the market. At the same 
time, the king understood the importance of Brazil when he 
called it his milk cow (vaca de kite). Indeed, historian Charles 
Boxer asserted that Portugal's independence depended chiefly 
on the Brazil trade, which centered on sugar and slavery. 

The Dutch did not show the same hesitation. In 1641 they 
seized Luanda, an important source of African slaves, in viola- 
tion of a truce with Portugal. Holland now held sugar and slave 
ports in the South Atlantic and the distribution system in 
Europe. Although Lisbon could not merely abandon its sub- 
jects in Brazil, it realized that it would be foolhardy to fight for 
the sugar area without also regaining the source of African 
slaves. 

The colonists in the Dutch-occupied area played their own 
game of deception. They borrowed Dutch money to restore 



22 



Historical Setting 



their war-torn plantations and engenhos and to buy slaves, but 
they realized that their long-term interests lay in expelling the 
Dutch and with them their indebtedness. After 1645, together 
with the governor general in Bahia, they conspired, rebelled, 
and fought against the Dutch. Their victories of 1648 and 1649 
at the Battle of Guararapes in the Recife area of Pernambuco 
are commemorated today. However, after nine years of war the 
scorched-earth tactics had ravaged the region. Although sugar 
prices rose in Europe, Brazilian planters could not respond 
and permanently lost their leading market position. The Dutch 
and English set up plantations in Suriname and Barbados, tak- 
ing advantage of the techniques developed in Brazil and their 
better access to capital, merchant fleets, and the northern 
European market. Although there were years of recovery 
(1665-80, 1698-1710), sugar was no longer the foundation of 
the Brazilian economy. Northeastern Brazil entered into a long 
stagnation, and Portugal, which now depended heavily on Bra- 
zil after its losses to the Dutch in the East Indies, watched its 
economy deteriorate. 

Gold Mining Displaces Cane Farming 

The decline in the sugar economy cut off the smaller North- 
eastern cane farmers from the customary paths to higher socio- 
economic status, producing a situation in which this potentially 
powerful segment of the population no longer had reasons to 
support the traditional colonial society. The cane farmers had 
the same social origins as the wealthier planter and mill-owner 
class but generally were less independent financially, and now 
their future was darkened. As sugar prices fell, the planters and 
mill owners' response was vertical integration (see Glossary); 
stages of production were consolidated under the control of 
fewer firms. Purchases from independent cane farmers were 
reduced and their lands acquired. The situation was potentially 
explosive. Historian Stuart Schwartz commented that "at no 
time in Brazilian history had the conditions for a profound 
social upheaval been more suitable." But it did not occur for 
two reasons: the cane farmers did not rebel against the sugar 
barons for fear of encouraging a slave rebellion, and in addi- 
tion, newly discovered gold fields to the south soon beckoned 
to free and slave populations. The removal of pressures for 
change solidified the hold of the great landowners on the 
coastal plantations. 



23 



Brazil: A Country Study 

Small deposits of alluvial gold had been exploited quietly for 
decades in Sao Paulo and to the south. The Paulistas likely 
found more than they revealed, fearing that the greed of the 
Portuguese authorities would soon strip them of their semi- 
independence. The discovery of gold by Paulistas in various 
parts of what is now Minas Gerais (General Mines), between 
the Serra de Mantiqueira and the headwaters of the Rio Sao 
Francisco, probably occurred between 1693 and 1695, but 
word filtered out slowly. The greatest concentration of deposits 
was along Brazil's oldest geological formation, the Serra do 
Espinhaco, lying in a north-south direction, throughout which 
it seemed that every river, stream, and brook glittered with 
gold. Mining camps that turned into the cities of Ouro Preto, 
Mariana, and Sabara soon located in its southern end, and by 
1730 diamonds were coming out of the northern reaches 
around Diamantina. 

Word of the discoveries set off an unprecedented rush, the 
likes of which would not be seen again until the California gold 
rush of 1849. The Paulistas soon found themselves competing 
for control with adventurers from the Northeast who streamed 
down the Vale Sao Francisco, from Portugal, and from else- 
where. By 1709-10 the Vale Sao Francisco had become a lawless 
region filled with the dregs of the Portuguese world. Consider- 
able violence broke out between the original Paulista bandei- 
rantes, who considered the mines theirs, and the outsiders 
(emboabas) . This fighting gave the crown authorities a reason 
for asserting royal control and arranging a settlement of the 
War of the Outsiders (Guerra dos Emboabas, 1708-09). Many 
Paulistas moved on to new gold discoveries in Goias and Mato 
Grosso. 

The discoveries shifted Brazil's center of gravity away from 
the Northeastern coast and toward the South and West. The 
loser would be Bahia, which in 1763 lost the viceregal capital to 
Rio de Janeiro, as power followed wealth. The population also 
shifted, as would-be miners and those who would profit from 
the mines arrived with their native or African slaves. The Jesuit 
Father Andre Joao Antonil (whose Italian name was Giovanni 
Antonio Andreoni) wrote the best contemporary study of Bra- 
zilian economic and social conditions. He said that by 1709 
some 30,000 people were in Minas Gerais. In the next decades, 
the population swelled. The 1735 tax records showed a total of 
100,141 slaves, among whom there were numerous natives. By 
1782 Minas Gerais's population of 319,769 included 166,995 



24 



A colonial church in Diamantina, Minas Gerais State 
Street scene in Diamantina, Minas Gerais State 
Courtesy Inter-American Development Bank, Washington 



25 



Brazil: A Country Study 

blacks, 82,110 mulattoes, and 70,664 whites. The state had the 
largest concentration of population in the viceroyalty of Brazil: 
20.5 percent of Brazil's 1,555,200 people. 

The early population consisted predominantly of unruly 
males, who knew no law but their own whims and who drove 
their slaves hard in an existence that historian Charles Boxer 
tagged as "nasty, brutish, and short." Many African slaves 
reacted by running away to form hiding places called quihmbos 
and were pursued by roughneck "bushwhacking captains" 
{capitdes do mato). However, during the first decades life could 
not have been easy for anyone. Items such as meat, corn, flour, 
and rum were rare and costly. The first local supply of hogs and 
chickens appeared only in 1723, and a flask of salt could cost as 
much as half a pound of gold. 

By the last decades of the eighteenth century, however, the 
cities of Minas Gerais were graced with impressive baroque and 
rococo churches, multistoried homes and shops, and grand 
public buildings. Poets and musicians enlivened the cultural 
scene. Some 3,000 musicians, mostly mulattoes, played fine 
baroque pieces, often in churches built by architect Antonio 
Francisco Lisboa (also known as "O Aleijadinho") and under 
ceilings painted by Manuel da Costa Ataide. 

The overland trails from Sao Paulo and from Parati were 
superseded by ones connecting to Rio de Janeiro. The new 
viceregal capital sent African slaves and European merchandise 
to Minas Gerais and received the heavily laden chests of gold 
and diamonds en route to Lisbon. Rio de Janeiro also served as 
the supply base for the newly created captaincies of Santa Cata- 
rina and Rio Grande de Sao Pedro, passing their livestock 
products on to Portugal. Those captaincies were linked over- 
land to Sao Paulo and Minas Gerais via the livestock trails that 
ran northeast from the pampas of what was later called Rio 
Grande do Sul to Sorocaba in Sao Paulo Province. 

Ranching had developed in the Northeastern interior as an 
adjunct to the sugar economy and in the South as the legacy of 
the Jesuit missions. In the eighteenth century, ranching was an 
increasingly important part of the overall colonial economy. 
The moving frontiers that it created drew the interior into 
effective relationships with European-oriented Brazil. From the 
interior of Maranhao, southeast through Piam, Ceara, Pernam- 
buco, and Bahia, then west into Goias, and on down to Rio 
Grande do Sul, a set of cowboy (vaqueiro) subcultures evolved 
that still mark local traditions. It was an age of leather in which 



26 



Historical Setting 



the horse was the center of life. Many, perhaps most, of the 
vaqueiros were native Indians, mestizos, African slaves, and 
mulattoes. In the northern and central areas, slaves and free 
men worked together unsupervised for months at a time. In 
the South, the gaucho culture, mixing native, Spanish, and 
Portuguese bloodlines and traditions, took hold throughout 
the pampas of the Rio de la Plata up into Rio Grande do Sul. In 
the latter state, by the mid-1 820s cattle had driven out wheat 
farming, and the mounted gaucho with his bolas, knife, mate 
tea, and open-fire barbecued beef became characteristic. 

Although gold mining weakened the dominance of sugar 
and seemingly stimulated the cattle industry, it did not totally 
supersede export agriculture. It displaced sugar as the colony's 
leading economic activity, but during the eighteenth century 
the value of gold exports never surpassed the value of sugar-led 
agricultural exports. Even so, gold did have serious long-term 
effects on Portugal. The fall in the value of Portugal's colonial 
products in the seventeenth century had made it difficult to 
obtain sufficient currency to purchase merchandise from 
northern Europe. In response, Portugal had begun to develop 
industries to meet its local and colonial requirements. The dis- 
covery of gold provided needed currency. 

In 1703 Portugal signed the Methuen Treaty with England, 
giving English woolens preference in Portuguese markets in 
return for a favorable tariff on Portuguese wines. This seem- 
ingly simple arrangement ended the move toward industrial 
development, drained Brazilian gold out of Portugal, and gave 
England its increasing dominance over Portugal and Brazil. 
The gold and diamond chests arriving at the royal treasury in 
Lisbon immediately were dispatched north to pay for imported 
cloth and manufactured goods. Local Portuguese producers 
could not compete with cheaper foreign prices. Furthermore, 
English vessels anchored in the Tagus River in the Iberian Pen- 
insula snatched large quantities of gold from under the noses 
of Portuguese authorities. Instead of Brazil's wealth being used 
to develop Portugal and its colonies, it helped finance the 
English industrial revolution and Portugal's eighteenth-cen- 
tury struggles to secure Brazilian boundaries. 

Even though an immense amount of wealth was sent abroad, 
much stayed in Brazil to build urban public works, such as 
fountains, bridges, buildings, and churches; to endow some 
charitable foundations, such as hospitals; and to finance the 
elaborate contraband trade with the Rio de la Plata and Alto 



27 



Brazil: A Country Study 

Peru (Upper Peru, or present-day Bolivia). However, it did not 
improve the condition of the poor; generate a prosperous mid- 
dle class; improve agriculture, education, or industry; or pro- 
duce lasting reform. 

In 1732 Antonio Rodrigues da Costa, a member of the Over- 
seas Council, warned the crown that the heavy colonial taxes 
would one day lead the colonists to cast off their loyalty. It was 
obvious to Rodrigues da Costa that the "larger and richer" 
would not accept forever being ruled by the "smaller and 
poorer." In 1738 royal adviser Dom Luis da Cunha suggested 
secretly to King Joao V that he take the title "emperor of the 
west" and move his court to Rio de Janeiro, which he argued 
was better situated than Lisbon to control the Portuguese mari- 
time and commercial empire. Rather than heed such advice, 
however, the monarchy tried at mid-century to gain more con- 
trol, stop the massive outflow of gold, and contain the British. 
Beginning in 1755, Marques de Pombal (Count Sebastiao Jose 
de Carvalho e Melo), as secretary of state for overseas domin- 
ions, shaped a series of reforms that gave chartered companies 
a monopoly of the Brazil trade, encouraged national manufac- 
turers, and worked to make commercial relations with Britain 
less dependent and more reciprocal. His goal was to revitalize 
the state and to break the stranglehold of British credit. He 
closed Brazilian ports to all foreign ships and hired foreign mil- 
itary experts to organize Brazil's defenses. To promote agricul- 
tural growth, Pombal distributed coffee and mulberry 
seedlings and also advocated production of indigo, flax, cot- 
ton, cocoa, and rice. Iron mining and smelting got underway 
in Sao Paulo, and shipbuilding and its attendant trades in 
Bahia and Rio de Janeiro increased. With the British seizure of 
Havana and Manila during the Seven Years' War (1756-63), the 
Portuguese wondered if Rio de Janeiro would be next. The 
crown responded with four goals: secure the borders, populate 
them for self-defense, defend the ports, and make the mines 
profitable. 

Pombal distrusted the Jesuits, who controlled vast areas in 
the interior of South America. He suspected commercial links 
between their prosperous missions and the British, and in Sep- 
tember 1759 expelled them from Brazil. The expulsion of the 
Jesuits caused the missions to fall to ruin and eliminated the 
strongest educational institutions in Brazil. Crown policy for- 
bade any university or even a printing press in the colony, and 
modern Brazilian universities date only from the 1930s. 



28 



Historical Setting 



The crown's education policy was based on the idea that 
colonial and metropolitan elites would blend to shape an impe- 
rial elite united by ideology in support of the crown. During 
the colonial era, 3,000 Brazilians studied at Portugal's Univer- 
sity of Coimbra, which in 1772 Pombal reformed with Enlight- 
enment perspectives. Between 1772 and 1785, 300 Brazilians, 
many from Minas Gerais, were at Coimbra. Pombal placed 
these graduates and other members of the colonial plutocracy 
injudicial, administrative, and military posts. However, policy 
intention and outcome often clashed. Some of these students 
and officials would begin to think in terms of independence. 

The production of gold began to decline about 1750 as the 
Minas Gerais society was solidifying and as the international sit- 
uation was becoming more complicated. The more the Portu- 
guese squeezed and tried to reduce the contraband in gold and 
diamonds, the more the divergence of interests grew. In the 
1770s, as less gold reached royal coffers, the crown reacted by 
imposing a per capita tax (derrama) to make up the difference 
between the amounts expected and those received. Meanwhile, 
competition from British, French, and Dutch colonies pushed 
the price of Brazilian sugar down lower on the Amsterdam 
market, reducing still more Portuguese revenues. Moreover, 
the decline in available gold affected the contraband trade that 
the Brazilians had carried on with the Rio de la Plata area, 
where they exchanged their illicit gold for Andean silver. The 
Brazilians then used the silver to buy illegal British goods, 
which they smuggled back into the Spanish domains. The elim- 
ination of the Jesuit missions, Spain's creation of the Viceroy- 
alty of the Rio de la Plata (1776), and the opening of direct 
trade between Spain and Buenos Aires further reduced the 
profitable trade in smuggled goods (see fig. 2). The decline in 
smuggling reduced transshipments of British goods through 
Portugal, reducing that country's overall level of trade with 
Britain catastrophically. The ensuing recession made it difficult 
to pay for the military expeditions sent to the southern borders 
during the 1770s, and the crown was unable to adjust expendi- 
tures in the face of declining revenues. 

In Minas Gerais, landowners had manufacturing establish- 
ments on their properties turning out cotton, linen, and 
woolen items, and most of the other captaincies had "work- 
shops and manufactories" that lessened the need to import 
from Portugal. The basis for a more complex textile industry 
was being laid. 



29 



Brazil: A Country Study 



VICEROYALTY OF C > 
NEW GRANADA C, 
€> Bogota 



GUIANA 



Quito 



Belem 



•v-1 



\* L/ma 

\ 



r 

^8) La Paz 



VICEROYALTY 
OF 
BRAZIL 



Recife 



Salvador 



VICEROYALTY 
OF 
PERU 



Tacific 
Ocean 



Santiago}''.. 



f VICEROYALTY. ^ 
OF THE / 
RIO DE ^ 
LA PLATA 



Mkntic 
Ocean 

Bio de Janeiro 



P 



BueiJOS Air&Si Montevideo 






Viceroyalty boundary 




Viceroyalty capital 




Audiencia* capital 


® 


Province capital 


• 


Populated place 


I I 


Portuguese territory 


i 


Spanish territory 


■■■■■J 


Dutch territory 




French territory 




Possession disputed 




by Britain and Spain 




*See Glossary 


500 


1000 Kilometers 



500 



1000 Miles 



Source: Based on information from Barbara A. Tanenbaum, ed., Encyclopedia of Latin 
America, 5, New York, 1996, 408. 

Figure 2. Four South American Viceroy alties, ca. 1800 



Then, in February 1777, Jose I (king of Portugal, 1750-77) 
died, and with him went Pombal's hold on power and his com- 
mon sense approach of encouraging industrial development. 
Pombal's successor as secretary of state for overseas dominions, 
Martinho de Melo e Castro, was alarmed that the nascent Bra- 



30 



Historical Setting 



zilian factories could make the colony independent and 
warned that "Portugal without Brazil is an insignificant power." 
In January 1785, he ordered that they all be "closed and abol- 
ished." 

In the early 1780s, Brazilian students at Coimbra had 
pledged themselves to seek independence. They were influ- 
enced greatly by the success of the North American British col- 
onies in forming the United States of America. In 1786 and 
1787, Jose Joaquim Maia e Barbalho of Rio de Janeiro, a Coim- 
bra graduate studying medicine at Montpelier and a critic of 
the colonial relationship, approached Ambassador Thomas Jef- 
ferson in France. He told Jefferson that the students intended 
to break with Portugal and requested the aid of the United 
States. One of the Coimbra graduates was Jose Bonifacio de 
Andrada e Silva, the patriarch of Brazilian independence. 

The failed Minas Conspiracy (Inconfidencia Mineira) of 
1789 involved some of the leading figures of the captaincy: tax 
collectors, priests, military officers, judges, government offi- 
cials, and mine owners and landowners. Some had been born 
in Portugal, several had their early education with the Jesuits 
and later studied at Coimbra, a number wrote poetry that is 
still read and studied. But what they had most in common were 
financial problems caused by crown policies that required 
them to pay their debts, or that cut them out of lucrative gold 
and diamond contraband trade. They argued that Brazil had 
all it needed to survive and prosper and that Portugal was a 
parasite. They pledged to lift restrictions on mining; exploit 
iron ore; set up factories; create a university, a citizens' militia, 
and a Parliament; pardon debts to the royal treasury; free 
slaves born in Brazil; and form a union with Sao Paulo and Rio 
de Janeiro similar to that of the United States. 

The history of the Minas Conspiracy is full of heavy drama. 
Revelation of the conspiracy turned brothers, friends, clients, 
and patrons against each other in an unseemly scramble to 
escape punishment. In one sense, the affair foreshadowed the 
nature of future Brazilian revolutionary movements in that it 
was a conspiracy of oligarchs seeking their own advantage, 
while claiming to act for the people. In the end, Lisbon 
decided to make an example of only one person, a low-ranked 
second lieutenant (alferes) of the Royal Mineiro Dragoons 
named Joaquim Jose da Silva Xavier ("Tiradentes"). His execu- 
tion in 1792 in Rio de Janeiro might well have been forgotten if 
the nineteenth-century republicans had not embraced him as a 



31 



Brazil: A Country Study 

symbolic counterpoise to Dom Pedro I, who declared Brazilian 
independence from Portugal in 1822. Later, with the establish- 
ment of the republic in 1889, every town and city in Brazil built 
a Tiradentes square, and the day of his execution, April 21, 
became a well-commemorated national holiday. Nonetheless, 
because the Minas Conspiracy was marked more by skuldug- 
gery than nobility and clarity, its value as a national symbol 
required selective interpretation and presentation. 

Portugal resolved to watch Brazilians more carefully and 
reacted forcefully to a nonexistent but suspected plot in Rio de 
Janeiro in 1794, and to a real, mulatto-led one in Bahia in 1798. 
Meanwhile, the French Revolution, the resulting slave rebel- 
lion in Haiti, and the fear of similar revolts in Brazil convinced 
the Brazilian elites that the dream of a United States-style con- 
servative revolution that would leave the slave-based socioeco- 
nomic structure intact and in their hands was impossible. The 
crown separated the residents of Minas Gerais from the revived 
coastal sugar producers through policies that set their interests 
at odds. Lisbon diverted Brazilian nationalism with greater 
imperial involvement. 

The Transition to Kingdom Status 

With the onset of the Napoleonic Wars, some Portuguese 
officials again raised the idea of moving the crown to the safety 
of Brazil. Dom Luis da Cunha's prophetic suggestion in 1738 
that Rio de Janeiro was "safer and more convenient" made 
great sense as the French army approached Lisbon in Novem- 
ber 1807. The British in 1801 had recommended transfer to 
Brazil in the event of an invasion and had promised to provide 
protection for the voyage and assistance in extending and con- 
solidating Portuguese territory in South America. In 1803 the 
Lisbon government, faced with the increasingly deadly struggle 
between France and Britain, had reconsidered the idea. The 
choice was between losing Portugal to the French and having 
the British seize Brazil, or moving the crown to Brazil, from 
which the struggle for Portugal could be resumed. In any case, 
the royal government did not move until Portugal was actually 
invaded in late 1807. 

At the time, the monarch was Queen Maria I, but because of 
mental illness triggered by her horror at the regicide in Paris, 
her son Dom Joao ruled as regent. His wife was Dona Carlota 
Joaquina, a Spanish princess and mother to their nine chil- 
dren, among whom the most important for Brazilian history 



32 



Historical Setting 



was Pedro de Alcantara de Braganca e Bourbon. Dom Joao 
opened Brazilian ports to world commerce, allowing British 
goods to stream in, and eliminating the Portuguese middle- 
men. Rio de Janeiro substituted for Lisbon in a centralized sys- 
tem that placed the various captaincies in subservient positions 
to the new center. For the Brazilian elites, the transfer of the 
court meant that they could have conservative political change 
without social disorder. And best of all, depending on their 
proximity to the court, they had the chance to obtain the titles 
and honors that they felt their wealth had earned them. How- 
ever, the pleasure of the elites was mixed with some frustration 
because now the monarch was close enough to keep an atten- 
tive watch on how they conducted their affairs. And with the 
court in Rio de Janeiro, the demands of international politics 
were more keenly felt. 

Portugal and the Braganca dynasty were obligated deeply to 
the British. The British not only saved the royal family and 
some 15,000 courtiers but also lent US$3 million in 1809 to 
keep the government functioning. The British also liberated 
Portugal from the French and reorganized the Portuguese 
army. In addition, one of their officers ruled as regent in Lis- 
bon. The Portuguese therefore had little with which to bargain 
when negotiating treaties. In 1810 Dom Joao signed agree- 
ments not only giving the British trade preferences and allow- 
ing them privileges of extraterritoriality but also promising to 
abolish the African slave trade. The last cut directly at the inter- 
ests of the propertied classes, on whom the crown depended. 

The crown had to duplicate, mostly from scratch, the gov- 
ernment institutions it had left behind in Lisbon. It set up a 
Supreme Military Council (Conselho Militar Superior); boards 
of treasury, trade, agriculture, and industry; a Court of 
Appeals; a royal printing press and official newspaper; and the 
Bank of Brazil (Banco do Brasil) . It created medical schools in 
Bahia and Rio de Janeiro, a school of fine arts, a museum of 
natural history, a public library, and the Botanical Garden 
(Jardim Botanico) in Rio de Janeiro. It also set up specialized 
courses of study in the Minas Gerais towns of Ouro Preto and 
Paracatu. Most of the fleet had been transferred, but a new 
army was organized, naval and military academies were estab- 
lished, and arsenals created. The crown built a powder factory 
and an ironworks. It dealt with public safety by forming the 
Royal Police Guard, which brutalized slaves, sailors, drunks, 
gamblers, and prostitutes into submission. The crown also 



33 



Brazil: A Country Study 

opened Brazil to European travelers, naturalists, scientists, and 
artists, who left a detailed picture of its life and landscape. 

Curiously, by staying in Brazil after the British liberated Por- 
tugal from the French in 1811, the crown was keeping British 
influence under some control, because here it was removed 
both from Britain and the British-commanded Portuguese 
army. In 1815 the crown, determined to set its own course, 
raised Brazil to a kingdom equal with Portugal and acclaimed 
Joao as king when his mother died in 1816. The crown gained 
further maneuverability by arranging marriages between the 
two princesses and the Spanish King Fernando VII and his 
brother, and more important, between Crown Prince Pedro 
and the daughter of Franz I of Austria, the Archduchess 
Leopoldina. 

The Kingdom of Portugal and Brazil, 1815-21 

Portuguese businessmen who invested locally in Brazil, 
nobles and government officials who built expensive homes 
there, and those who married into provincial wealth shared a 
common interest in remaining. Indeed, what took shape was a 
new concept of a dual monarchy of Brazil and Portugal, which 
even under the best of circumstances would have been difficult 
to make work. It was an expedient idea that would founder 
because of resistance by those in Portugal who saw their status 
and that of the kingdom endangered; by the British, who 
wanted the king back in Lisbon, where he was more vulnerable; 
and by the unwillingness of Brazilians to suffer the indignity of 
being returned to colonial rank. 

The centralization of power in Rio de Janeiro met with vio- 
lent resistance in the Northeast. When Pernambuco raised the 
banner of republican rebellion in 1817, it was followed by 
Parafba do Norte, Rio Grande do Norte, and the south of 
Ceara, each of which acted to defend local interests without 
thought of federating. They resented their loss of autonomy to 
Rio de Janeiro and the Portuguese who had settled in the 
Northeast since 1808. Significantly, although they sent envoys 
to secure recognition from Britain and the United States and 
to spread the revolt to Bahia, they did not send agents to cen- 
tral or southern Brazil. The revolt was crushed brutally. 
Although unsuccessful, the 1817 "Pernambuccan revolution" 
shook the monarchy's foundations because it had pushed aside 
authority and tarnished the crown's aura of invincibility. In des- 
peration, the monarchy responded by banning all secret societ- 



34 



Historical Setting 



ies and by garrisoning Rio de Janeiro, Salvador, and Recife with 
fresh troops from Portugal. 

Meanwhile, the monarchy was waging war in the Rio de la 
Plata. King Joao regarded the East Bank of the Rio de la Plata 
(present-day Uruguay) as the proper and true boundary of 
Brazil. Over British objections, he brought veteran troops from 
Portugal to seize Montevideo and to wage a wearing campaign 
(1816-20) against the forces of independence-minded Jose 
Gervasio Artigas, the father of Uruguay. The region was incor- 
porated into the United Kingdom as the Cisplatine Province in 
1821. Nonetheless, even as it was expanding, the United King- 
dom, as the Rio de Janeiro royalists termed it, was suffering 
from pressures in Portugal itself. 

The Pernambuccan revolution in 1817 encouraged army 
officers in Portugal to conspire against the regency of British 
Marshal William Carr Beresford. Twelve of the conspirators, 
including a general officer, were tried secretly and hanged. 
Anti-British sentiment deepened. In 1820, when a military 
revolt in Spain forced the revived absolutist regime of Fer- 
nando VII (1784-1833) to restore the liberal constitution of 
1812, the Portuguese military followed suit by expelling the 
British officers and forming revolutionary juntas. The military 
petitioned the king's return and summoned a Cortes (the Por- 
tuguese Parliament), the first since 1697 when the crown had 
dispensed with such bodies. 

Unable to do more, Joao pardoned the juntas' usurpation of 
his prerogative to summon a Cortes and acknowledged that a 
Cortes could be useful in making proposals to him on how best 
to govern the United Kingdom. Then, in January 1821, Portu- 
guese officers and troops, as well as Brazilian liberals, took over 
provincial governments in Bahia and Belem, and in late Febru- 
ary, troops in Rio de Janeiro threw in with the movement and 
forced the king to take an oath to accept any constitution the 
Cortes might write. In effect, Brazil was again being ruled from 
Portugal. A few days later, a royal decree announced that the 
king would return to Lisbon, leaving his twenty-four-year-old 
son Dom Pedro as regent in Brazil. 

On April 25, 1821, twelve ships carrying the king and queen, 
4,000 officials, diplomats, and families, as well as purloined 
funds and jewels from the Bank of Brazil, set course for Lisbon. 
The city and country that they left behind no longer consti- 
tuted the closed colony of thirteen years before. Thanks to the 
surveys, expeditions, and studies that Joao had encouraged, 



35 



Brazil: A Country Study 

Brazil's resources would be exploited at a steadily increasing 
pace, but in a fashion that tied the country more closely to the 
rapidly expanding industrial capitalism of the North Atlantic. 
Nonetheless, Joao VI and Queen Carlota exemplified the fad- 
ing absolutist regime; their son Pedro would seek to be more 
modern by embracing the new ideas of liberal constitutional- 
ism. 

During the thirteen years that Joao resided in Rio de 
Janeiro, international trade expanded as reflected by the grow- 
ing number of foreign ships anchoring in the bay: from ninety 
in 1808 to 354 in 1820. By 1820 Rio de Janeiro had more than 
3,000 foreigners among its 113,000 inhabitants. 

Rio de Janeiro also had coffee houses serving the product 
that would become the backbone of the economy. Expanding 
from seedlings nurtured in the Jardim Botanico, coffee cultiva- 
tion spread from the Rio de Janeiro area over the Serra do Mar 
into the fertile upland valley, through which the Rio Parafba 
flows from Sao Paulo easterly to the sea, dividing the provinces 
of Minas Gerais and Rio de Janeiro. On both sides of the river, 
the tropical forests were cut to make way for the coffee groves. 
Mule trains that once brought gold from Minas Gerais to Rio 
de Janeiro now carried coffee in quantities that swelled from 
2,304 kilos in 1792 to 7,761,600 kilos in 1820, and would reach 
82,178,395 kilos in 1850. 

Sao Paulo's entry into the coffee age lay in the future, but in 
1821 it was providing herds of mules and horses for the coffee 
pack trains. The Cisplatine and Rio Grande do Sul were ship- 
ping abroad hides, tallow, and dried meat. In contrast, the 
Northeast and North were in decline because an 1815 treaty 
between Brazil and Britain forbade the African slave trade 
north of the equator, thereby reducing the demand for Bahian 
molasses-soaked rolled tobacco, and because Cuban competi- 
tion slashed deeply into the Northeast's sugar market in the 
United States and Europe. Even cotton, which a few years 
before seemed a secure export for Maranhao, was over- 
whelmed by the post-War of 1812 expansion in the southern 
United States. The world demand for Amazonian nuts, cocoa, 
skins, herbs, spices, and rubber was still weak in 1821. Finally, 
in the Brazilian west (Mato Grosso and Goias) gold mining had 
all but ended, and subsistence farming and livestock raising 
were predominant. Throughout the country, but more so from 
Bahia through Minas Gerais to Rio de Janeiro and Sao Paulo, 
the labor force was made up of African or locally born black 



36 



Historical Setting 



slaves. The native heritage lived on in the substantial number 
of Tupi-speaking races and mixtures that lived in the tropical 
forest region. 

The Empire, 1822-89 

Emperor Pedro 1, 1822-31 

Dom Pedro meant to rule frugally and started by cutting his 
own salary, centralizing scattered government offices, and sell- 
ing off most of the royal horses and mules. He issued decrees 
that eliminated the royal salt tax to spur output of hides and 
dried beef, forbade arbitrary seizure of private property, 
required a judge's warrant for arrests of freemen, and banned 
secret trials, torture, and other indignities. He also sent elected 
deputies to the Cortes in Portugal. However, slaves continued 
to be bought and sold and disciplined with force, despite his 
assertion that their blood was the same color as his. In Septem- 
ber 1821, the Cortes, with only a portion of the Brazilian dele- 
gates present, voted to abolish the Kingdom of Brazil and the 
royal agencies in Rio de Janeiro and to make all the provinces 
subordinate directly to Lisbon. Portugal sent troops to Brazil 
and placed all Brazilian units under Portuguese command. In 
January 1822, tension between Portuguese troops and the 
Luso-Brazilians (Brazilians born in Portugal) turned violent 
when Pedro accepted petitions from Brazilian towns begging 
him to refuse the Cortes's order to return to Lisbon. Respond- 
ing to their pressure and to the argument that his departure 
and the dismantling of the central government would trigger 
separatist movements, he vowed to stay. The Portuguese "lead 
feet," as the Brazilians called the troops, rioted before concen- 
trating their forces on Cerro Castello, which was soon sur- 
rounded by thousands of armed Brazilians. Dom Pedro 
"dismissed" the Portuguese commanding general and ordered 
him to remove his soldiers across the bay to Niteroi, where they 
awaited transport to Portugal. Pedro formed a new govern- 
ment headed by Jose Bonifacio de Andrada e Silva of Sao 
Paulo. This former royal official and professor of science at 
Coimbra was crucial to the subsequent direction of events and 
is regarded as one of the formative figures of Brazilian nation- 
alism, indeed, as the patriarch of independence. 

The atmosphere was so charged that Dom Pedro sought 
assurances of asylum on a British ship in case he lost the loom- 
ing confrontation; he also sent his family to safety out of the 



37 



Brazil: A Country Study 

city. In the following days, the Portuguese commander delayed 
embarcation, hoping that expected reinforcements would 
arrive. However, the reinforcements that arrived off Rio de 
Janeiro on March 5, 1822, were not allowed to land. Instead, 
they were given supplies for the voyage back to Portugal. This 
round had been won without bloodshed. 

Blood had been shed in Recife in the Province of Pernam- 
buco, when the Portuguese garrison there had been forced to 
depart in November 1821. In mid-February 1822, Bahians 
revolted against the Portuguese forces there but were driven 
into the countryside, where they began guerrilla operations, 
signaling that the struggle in the north would not be without 
loss of life and property. To secure Minas Gerais and Sao Paulo, 
where there were no Portuguese troops but where there were 
doubts about independence, Dom Pedro engaged in some 
royal populism. 

Towns in Minas Gerais had expressed their loyalty at the 
time of Pedro's vow to remain, save for the junta in Ouro Preto, 
the provincial capital. Pedro realized that unless Minas Gerais 
were solidly with him, he would be unable to broaden his 
authority to other provinces. With only a few companions and 
no ceremony or pomp, Pedro plunged into Minas Gerais on 
horseback in late March 1822, receiving enthusiastic welcomes 
and allegiances everywhere. Back in Rio de Janeiro on May 13, 
he proclaimed himself the "perpetual defender of Brazil" and 
shortly thereafter called a Constituent Assembly (Assembleia 
Constituinte) for the next year. To deepen his base of support, 
he joined the freemasons, who, led by Jose Bonifacio Andrada 
e Silva, were pressing for parliamentary government and inde- 
pendence. More confident, in early August he called on the 
Brazilian deputies in Lisbon to return, decreed that Portu- 
guese forces in Brazil should be treated as enemies, and issued 
a manifesto to "friendly nations." The manifeso read like a dec- 
laration of independence. 

Seeking to duplicate his triumph in Minas Gerais, Pedro 
rode to Sao Paulo in August to assure himself of support there 
and began a disastrous affair with Domitila de Castro that 
would later weaken his government. Returning from an excur- 
sion to Santos, Pedro received messages from his wife and from 
Andrada e Silva that the Cortes considered his government 
traitorous and was dispatching more troops. In a famous scene 
at Ipiranga on September 7, 1822, he had to choose between 
returning to Portugal in disgrace or opting for independence. 



38 



Praca (plaza) Tiradentes, Ouro Preto, Minas Gerais State 

Courtesy Jaklen Muoi Tuyen 
Street scene in Ouro Preto 
Courtesy Michael Borg-Hansen 



39 



Brazil: A Country Study 

He tore the Portuguese blue and white insignia from his uni- 
form, drew his sword, and swore: "By my blood, by my honor, 
and by God: I will make Brazil free." Their motto, he said, 
would be "Independence or Death!" 

Pedro's government employed Admiral Thomas Alexander 
Cochrane, one of Britain's most successful naval commanders 
in the Napoleonic Wars and recently commander of the Chil- 
ean naval forces against Spain. Pedro's government also hired a 
number of Admiral Cochrane's officers and French General 
Pierre Labatut, who had fought in Colombia. These men were 
to lead the fight to drive the Portuguese out of Bahia, Mara- 
nhao, and Para, and to force those areas to replace Lisbon's 
rule with that of Rio de Janeiro. Money from customs at Rio de 
Janeiro's port and local donations outfitted the army and the 
nine-vessel fleet. The use of foreign mercenaries brought 
needed military skills. The much-feared Cochrane secured 
Maranhao with a single warship, despite the Portuguese mili- 
tary's attempt to disrupt the economy and society with a 
scorched-earth campaign and with promises of freedom for the 
slaves. By mid-1823 the contending forces numbered between 
10,000 and 20,000 Portuguese, some of whom were veterans of 
the Napoleonic Wars, versus 12,000 to 14,000 Brazilians, mostly 
in militia units from the Northeast. 

Some historians have erred in supporting historian Manuel 
de Oliveira Lima's contention that independence came with- 
out bloodshed. In fact, although both sides avoided massive set 
battles, they did engage in guerrilla tactics, demonstrations, 
and countermoves. There is little information on casualties, 
but the fighting provided a female martyr in Mother Joana 
Angelica, who was bayoneted to death by Portuguese troops 
invading her convent in Bahia; and an example of female grit 
in Maria Quiteria de Jesus, who, masquerading as a man, 
joined the imperial army and achieved distinction in several 
battles. 

Britain and Portugal recognized Brazilian independence by 
signing a treaty on August 29, 1825. Until then, the Brazilians 
feared that Portugal would resume its attack. Portuguese retri- 
bution, however, came in a financial form. Secret codicils of 
the treaty with Portugal required that Brazil assume payment of 
1.4 million pounds sterling owed to Britain and indemnify 
Dom Joao VI and other Portuguese for losses totaling 600,000 
pounds sterling. Brazil also renounced future annexation of 
Portuguese African colonies, and in a side treaty with Britain 



40 



Historical Setting 



promised to end the slave trade. Neither of these measures 
pleased the slave-holding planters. 

Organizing the new government quickly brought the differ- 
ences between the emperor and his leading subjects to the 
fore. In 1824 Pedro closed the Constituent Assembly that he 
had convened because he believed that body was endangering 
liberty. As assembly members, his advisers, Jose Bonifacio de 
Andrada e Silva and Dom Pedro's brothers, had written a draft 
constitution that would have limited the monarch by making 
him equal to the legislature and judiciary, similar to the presi- 
dent of the United States. They wanted the emperor to push 
the draft through without discussion, which Pedro refused to 
do. Troops surrounded the assembly as he ordered it dissolved. 
He then produced a constitution modeled on that of Portugal 
(1822) and France (1814). It specified indirect elections and 
created the usual three branches of government but also added 
a fourth, the moderating power, to be held by the emperor. 
The moderating power would give the emperor authority to 
name senators and judges and to break deadlocks by summon- 
ing and dismissing parliaments and cabinets. He also had 
treaty-making and treaty-ratifying power. Pedro's constitution 
was more liberal than the assembly's in its religious toleration 
and definition of individual and property rights, but less so in 
its concentration of power in the emperor. 

The constitution was more acceptable in the flourishing, cof- 
fee-driven Southeastern provinces than in the Northeastern 
sugar and cotton areas, where low export prices and the high 
cost of imported slaves were blamed on the coffee-oriented 
government. In mid-1824, with Pernambuco and Ceara lead- 
ing, five Northeastern provinces declared independence as the 
Confederation of the Equator, but by year's end the short-lived 
separation had been crushed by Admiral Cochrane. With the 
Northeast pacified, violence now imperiled the South. 

In 1825 war flared again over the Cisplatine Province, this 
time with Buenos Aires determined to annex the East Bank. 
The empire could little afford the troops, some of whom were 
recruited in Ireland and Germany, or the sixty warships needed 
to blockade the Rio de la Plata. A loan from London bankers 
was expended by 1826, and Pedro had to call the General 
Assembly to finance the war. The blockade raised objections 
from the United States and Britain, and reverses on land in 
182V made it necessary to negotiate an end to the US$30 mil- 
lion Cisplatine War. The war at least left Uruguay independent 



Brazil: A Country Study 

instead of an Argentine province. In June 1828, harsh disci- 
pline and xenophobia provoked a mutiny of mercenary troops 
in Rio de Janeiro; the Irish were shipped home and the Ger- 
mans sent to the South. The army was reduced to 15,000 mem- 
bers, and the antislavery Pedro, now without military muscle, 
faced a Parliament controlled by slaveowners and their allies. 

As coffee exports rose steadily, so did the numbers of 
imported slaves; in Rio de Janeiro alone they soared from 
26,254 in 1825 to 43,555 in 1828. In 1822 about 30 percent, or 
1 million, of Brazil's population were African-born or 
-descended slaves. Slavery was so pervasive that beggars had 
slaves, and naval volunteers took theirs aboard ship. 

Pedro had written that slavery was a "cancer that is gnawing 
away at Brazil" and that no one had the right to enslave 
another. He wanted to abolish slavery, but his own liberal con- 
stitution gave the law-making authority to the slavocrat-con- 
trolled Parliament. In Brazil liberal principles and political 
formulas were given special meaning. The language of social 
contract, popular sovereignty, supremacy of law, universal 
rights, division of powers, and representative government was 
stripped of its revolutionary content and applied only to a 
select, privileged minority. 

After 1826 the slavocrat agenda was to control the court sys- 
tem; to provide harsh punishments for slave rebellion but mild 
ones for white revolt; to reduce the armed forces, cleansing 
them of foreigners unsympathetic to slavery; to keep tariffs low 
and eliminate the Bank of Brazil in order to deny the central 
government the ability to stimulate a rival, finance-based indus- 
trial capitalism; and to shape immigration policy in such a way 
as to encourage servile labor instead of independent farmers 
or craftsmen. Led by Bernardo Pereira de Vasconcelos of Minas 
Gerais in the assembly, slavocrats argued that slavery was not 
demoralizing, that foreign capital and technology would not 
help Brazil, and that railroads would only rust. Others, such as 
Nicolau de Campos Vergueiro of Sao Paulo, argued in favor of 
replacing slavery with free European immigrants. In the end, 
the Parliament established a contract system that was little bet- 
ter than slavery. There would be no liberal empire. Laws and 
decrees unacceptable to the slavocrats simply would not take 
effect, such as the order in 1829 forbidding slave ships to sail 
for Africa. These items of the slavocrat agenda were the roots 
of the regional rebellions of the nineteenth century. 



42 



Historical Setting 



After Dom Joao's death in 1826, despite Pedro's renuncia- 
tion of his right to the Portuguese throne in favor of his daugh- 
ter, Brazilian nativist radicals falsely accused the emperor of 
plotting to overthrow the constitution and to proclaim himself 
the ruler of a reunited Brazil and Portugal. They raised ten- 
sions by provoking street violence against the Portuguese of 
Rio de Janeiro and agitated for a federalist monarchy that 
would give the provinces self-government and administrative 
autonomy. Brazil's fate was in the hands of a few people con- 
centrated in the capital who spread false stories and under- 
mined discipline in the army and police. It would not be the 
last time that events in Rio de Janeiro would shape the future. 
When Pedro dismissed his cabinet in April 1831, street and mil- 
itary demonstrators demanded its reinstatement in violation of 
his constitutional prerogatives. He refused, saying: "I will do 
anything for the people but nothing [forced] by the people." 
With military units assembled on the Campo Santana, an 
assembly ground in Rio de Janeiro, and people in the streets 
shouting "death to the tyrant," he backed down. Failing to form 
a new cabinet, he abdicated in favor of his five-year-old son 
Pedro II, boarded a British warship, and left Brazil as he had 
arrived, under the Union Jack. 

The Regency Era, 1831-40 

The three regents that ruled in the young emperor's name 
from 1831 to 1840 witnessed a period of turmoil as local fac- 
tions struggled to gain control of their provinces and to keep 
the masses in line. Out of desperation to weaken the radical 
appeals for federalism, republicanism, and hostility toward the 
Portuguese, and to protect against contrary calls for Pedro Fs 
restoration, the regency in Rio de Janeiro gave considerable 
power to the provinces in 1834. Brazil took on the appearance 
of a federation of local pdtrias (autonomous centers of regional 
power) with loose allegiance to the Rio de Janeiro government, 
whose function was to defend them from external attack and to 
maintain order and balance among them. The government's 
ability to carry out that function was impaired, however, by the 
low budgets allowed the army and navy, and by the creation of 
a National Guard, whose officers were local notables deter- 
mined to protect their private and regional interests. The 
rebellions, riots, and popular movements that marked the next 
years did not spring as much from economic misery as from 



43 



Brazil: A Country Study 

attempts to share in the prosperity stemming from North 
Atlantic demand for Brazil's exports. 

Many of the disturbances were so fleeting they were all but 
forgotten. For example, in Rio de Janeiro alone there were five 
uprisings in 1831 and 1832. Another eight of the more famous 
revolts in the 1834-49 period included the participation of 
lower-class people, Indians, free and runaway blacks, and 
slaves, which accounts for their often fierce suppression. 
Republican objectives were apparent in some of these revolts, 
such as the War of the Farrapos (ragamuffins), also known as 
the Farroupilha Rebellion (1835-45), in Santa Catarina and 
Rio Grande do Sul. Others, such as the Cabanagem in Para in 
1835-37, the Sabinada in Salvador in 1837-38, the Balaiada 
Rebellion in Maranhao in 1838-41, and the ones in Minas 
Gerais and Sao Paulo in 1842, were propelled simultaneously 
by antiregency and promonarchial sentiments. Such unrest dis- 
pels the notion that the history of state formation in Brazil was 
peaceful. Instead, it shows the confrontation between the 
national government and the splintering pdtrias, which would 
continue in varying degrees for the next century. 

Pedro Fs death from tuberculosis in 1834 had sapped the 
restorationist impulse and removed the glue that held uneasy 
political allies together. With the regency attempting to sup- 
press simultaneous revolts in the South and North, it could not 
easily reassert its supremacy over the remaining provinces. Bra- 
zil could well have split apart in those years. It did not for three 
reasons. First, the military was reorganized as an instrument of 
national unity under the leadership of Luis Alves de Lima e 
Silva, who was ennobled as the Duke of Caxias (Duque de Cax- 
ias) and who would later be proclaimed Patron of the Brazilian 
Army Second, the specter of slave revolt and social disintegra- 
tion had become all too real. And third, the "vision of Brazil as 
a union of autonomous patrias" in Roderick J. Barman's 
phrase, was replaced by the vision of Brazil as a nation-state. 
Rather than risk their fortunes and lives, the elites, longing for 
a focus of loyalty, identity, and authority, rallied around the 
boy-emperor, who ascended the throne on July 18, 1841, at age 
fifteen instead of the constitutionally specified age of eighteen. 
Thus, the second empire was born in the hope that it would be 
an instrument of national unity, peace, and prosperity. 

The Second Empire, 1840-89 

In the 1840s, the Brazilian nation-state coalesced as authori- 



44 



Historical Setting 



ties suppressed revolts and rewrote Brazilian law. These laws, 
however, did not bode well for democracy because they shaped 
an electoral system based on government-controlled fraud. In 
1842, on the advice of conservative courtiers, Pedro II used his 
constitutional moderating power to dismiss the newly elected 
liberal Chamber of Deputies and called new elections, which 
the conservatives won by stuffing the ballot boxes. In so doing, 
he set a pattern of favoring conservatives over liberals. 

The constitution of 1824 had created the usual three govern- 
mental powers — executive, legislative, and judicial — and a 
fourth, the moderating power. The emperor held this power, 
which gave him the right to name senators, to dismiss the legis- 
lature, and to shift control of the government from one party 
to the other. In theory, he was to act as the political balance 
wheel. It should be noted that the parties were more groupings 
of members of Parliament than ideologically based movements 
dependent on distinct electorates. Historian Richard Graham 
observed that "No particular political philosophy distinguished 
one group from another." Then, as now, the political system 
had an artificial aspect to it; it did not relate openly to the real 
power structure of the country — the "lords of the land" (sen- 
hores da terra) who ran local affairs. 

A good example of how the real power holders manipulated 
the system to protect their narrow interests to the detriment of 
the national interest was the Land Law of 1850, which set the 
pattern for modern landholding. The Land Law ended the 
colonial practice of obtaining land through squatting or royal 
grants and limited acquisition to purchase, thereby restricting 
the number of people who could become owners. By creating 
obstacles to landownership, the law's framers hoped to force 
free labor to work for existing landlords. However, proprietors 
sabotaged the law by not surveying their lands and not resolv- 
ing their conflicting claims in order to keep titles cloudy and 
hence in their hands. One result of the uncertain titles was that 
slaves were used as collateral. 

Also in 1850, British pressure finally forced the Brazilian gov- 
ernment to outlaw the African slave trade. London, tiring of 
Brazilian subterfuge, authorized its navy to seize slave ships in 
Brazilian waters, even in ports. Rather than risk open war with 
Britain, paralyzation of commerce, widespread slave unrest, 
and destabilization of the empire, the government outlawed 
the African slave trade. It deported a number of Portuguese 
slavers and instructed the provincial presidents, police, judges, 



45 



Brazil: A Country Study 

and military to crack down. Over the next five years, even clan- 
destine landings stopped, and despite the tempting rise of slave 
prices in the coffee districts of Rio de Janeiro Province, the 
trans-Atlantic trade ended. Although the British claimed 
credit, it should be noted that for the first time a Brazilian gov- 
ernment had the power to enforce a law along the length of 
the coast. Also, internal support for the trade had weakened. 
Most slave importers were Portuguese, who had been selling 
the ever more expensive Africans to landowners on credit at 
climbing interest rates, in some cases forcing the latter into 
insolvency and loss of property. Xenophobia and the debts of 
the landed classes combined to support the government 
action. 

Ending the slave trade had a number of consequences. First, 
because labor needs increased in Rio de Janeiro and Sao Paulo 
as the world demand for coffee rose, Northeastern planters 
sold their surplus slaves to Southern growers. In addition, Par- 
liament passed laws encouraging European immigration, as 
well as the Land Law of 1850. Second, ending the slave trade 
freed capital that could then be used for investment in trans- 
port and industrial enterprises. Third, it ensured that Britain 
did not interfere in Brazil's military intervention to end the 
rule in Buenos Aires of Juan Manuel de Rosas (president of 
Argentina, 1829-33, 1835-52). 

Coffee dominated exports in the last half of the nineteenth 
century, going from 50 percent of exports in 1841-50 to 59.5 
percent in 1871-80. But sugar exports also increased, and cot- 
ton, tobacco, cocoa, rubber, and mate were important. The vast 
cattle herds that grazed the Northeastern sertdo, the plains 
(cerrado) of Minas Gerais, and the pampas of Rio Grande do 
Sul foreshadowed Brazil's status in 1990 as the world's second 
largest meat exporter. Meat-salting plants (saladeros) in Rio 
Grande do Sul shipped sun-dried beef to the expanding coffee- 
growing region to feed its slaves and freed tenant farmers 
(colonos). In addition to beef, Brazilians ate protein-rich beans, 
rice, and corn, much of which came from Minas Gerais or the 
immigrant colonies of Rio Grande do Sul. Interregional trade 
was budding, but for the most part local self-sufficiency was the 
norm. Indeed, more people produced food for the domestic 
market than labored on export crops. 

Expanding coffee production in the 1850s and 1860s 
attracted British investment in railroads to speed transport of 
the beans to the coast. The Santos-Sao Paulo Railroad (1868) 



46 



Teatro Amazonas, the newly reopened, nineteenth-century belle epoque 
opera house in Manaus, Amazonas State, was built with materials 

imported from Europe. 
Courtesy Jaklen Muoi Tuyen 

was the first major breach of the coastal escarpment, which had 
slowed development of the Southern plateau. Similarly, in the 
Northeast railroads began to cut into the interior from the 
coast. But generally the pattern was to connect a port with its 
export-oriented hinterland, creating a series of enclaves that 
were connected with each other by sea. Well into the twentieth 
century, Brazil lacked railroads and highways linking its major 
regions, urban areas, and economic zones. The country was 
laced together by intricate networks of mule trails that moved 
goods and people throughout the vast interior. Viewed as 
archaic by modern observers, the mule train trails nonetheless 
were important in Brazil's formation, tying the various regions 
together and spreading a common language and culture. 

The empire had lost the East Bank of the Rio de la Plata with 
the founding of Uruguay in 1828, but it continued to meddle 
in that republic's affairs. Brazil's most important businessman, 
Irineu Evangelista de Sousa, the Visconde de Maua, had such 
heavy financial interests there that his company was effectively 
the Uruguayan government's bank. Other Brazilians owned 
about 400 large estates (estancias) that took up nearly a third of 



47 



Brazil: A Country Study 

the country's territory. They objected to the taxes the Uruguay- 
ans imposed when they drove their cattle back and forth to Rio 
Grande do Sul, and they took sides in the constant fighting 
between Uruguay's Colorado and Blanco political factions, 
which later became the Colorado Party and the National Party 
(Blancos). Some of Rio Grande do Sul's gauchos did not accept 
Uruguayan independence in 1828 and continually sought 
intervention. 

In the mid-1 860s, the imperial government conspired with 
Buenos Aires authorities to replace the Blanco regime in Mon- 
tevideo with a Colorado one. The Blancos appealed to Para- 
guayan dictator Francisco Solano Lopez (president, 1862-70), 
who harbored his own fears of the two larger countries and 
who regarded a threat to Uruguay as a menace to Paraguay. A 
small landlocked country, Paraguay had the largest army in the 
region: 64,000 soldiers compared with Brazil's standing army of 
18,000. In 1864 Brazil and Argentina agreed to act together 
should Solano Lopez attempt to save the Blancos. In Septem- 
ber 1864, wrongly convinced that he would not be so foolish, 
the Brazilians sent troops into Uruguay to put the Colorados in 
power. Each side miscalculated the intentions, capabilities, and 
will of the other. Paraguay reacted by seizing Brazilian vessels 
on the Rio Paraguai and by attacking the province of Mato 
Grosso. Solano Lopez, mistakenly expecting help from anti- 
Buenos Aires caudillos, sent his forces into Corrientes to get at 
Rio Grande do Sul and Uruguay and found himself at war with 
both Argentina and Brazil. In May 1865, those two countries 
and Colorado-led Uruguay signed an alliance that aimed to 
transfer contested Paraguayan territory to the larger countries, 
to open Paraguayan rivers to international trade, and to 
remove Solano Lopez. By September 1865, the allies had 
driven the Paraguayans out of Rio Grande do Sul, and they 
took the war into Paraguay when that country spurned their 
peace overtures. 

Fiercely defending their homeland, the Guarani-speaking 
Paraguayans defeated the allies at Curupaiti in September 
1866. The Argentine president, General Bartolome Mitre 
(1861-68), took the bulk of his troops home to quell opposi- 
tion to his war policy, leaving the Brazilians to soldier on. The 
famed General Lima e Silva, Marquis and later Duke of Caxias, 
took command of the allied forces and led them until the fall 
of Asuncion in early 1869. With stubborn determination, the 



48 



Historical Setting 



Brazilians pursued Solano Lopez until they cornered and killed 
him. They then occupied Paraguay until 1878. 

The war dragged on for several reasons. First, the Paraguay- 
ans were better prepared at the outset and conducted an effec- 
tive offensive into the territories of their adversaries, 
immediately handing them defeats. Even later, when pushed 
back onto their own land, they had the advantages of knowing 
the ground, of having prepared defenses, and of fielding stub- 
bornly loyal troops. Second, it took the Brazilians considerable 
time to marshal their forces and considerable effort and cost to 
keep them supplied. Third, the Argentines, hoping to improve 
their postwar situation in relation to Brazil, delayed operations 
partly to force the empire to weaken itself by expending its 
resources. Fourth, this was the era of "unconditional surren- 
der." It was militarily fashionable to pursue Solano Lopez to the 
bitter end. 

The war had important consequences for Brazil and the Rio 
de la Plata region. It left Brazil and Argentina facing each other 
over a prostrate Paraguay and a dependent Uruguay, a situa- 
tion that would soon turn into a tense rivalry that repeatedly 
assumed warlike postures. Historians debate the number of 
Paraguayan casualties, some asserting that 50 percent of Para- 
guayans were killed, others arguing that it was much less, possi- 
bly 8 to 9 percent of the prewar population total. Nonetheless, 
the losses from battle, disease, and starvation were severe and 
disrupted the development of the republic. In Brazil the war 
contributed to the growth of manufacturing, to the profession- 
alization of the armed forces and their concentration in Rio 
Grande do Sul, to the building of roads and the settling of 
European immigrants in the southern provinces, and to the 
increased power of the central government. Most important 
for the future, the war brought the military firmly into the 
political arena. Military officers were keenly aware that the war 
had exposed the military's lack of equipment, training, and 
organization. Officers blamed these shortcomings on civilian 
officials. In the next decades, reformist officers seeking to 
modernize the army would criticize the Brazilian political 
structure and its peculiar culture as obstacles to moderniza- 
tion. 

The end of the war coincided with the resurgence of republi- 
canism as disenchanted liberals cast about for a new route to 
power. The 1867 collapse of the short-lived, French-sponsored 
Mexican monarchy of Maximilian left Brazil as the hemi- 



49 



Brazil: A Country Study 

sphere's only monarchial regime. And because Argentina 
appeared to prosper in the 1870s and 1880s, it served as a pow- 
erful advertisement for republican government. The republi- 
can ideology spread in urban areas and in provinces, such as 
Sao Paulo and Rio Grande do Sul, where the people did not 
believe they benefited from imperial economic policies. The 
republican manifesto of 1870 proclaimed that "We are in 
America and we want to be Americans." Monarchy was, the 
writers asserted, hostile to the interests of the American states 
and would be a continuous source of conflict with Brazil's 
neighbors. The republicans embraced the abolition of slavery 
to remove the stigma of Brazil's being the only remaining slave- 
holding country (save for Spanish Cuba) in the hemisphere. It 
was not so much that they believed that slavery was wrong as 
that it gave the country an image distasteful to Europeans. Abo- 
lition, which would come in 1888, did not imply that liberals 
wanted deep social reform or desired a democratic society. 
Indeed, their arguments against slavery were weighted toward 
efficiency rather than morality. Once in power, the republicans 
looked to discipline the legally free work force with various sys- 
tems of social control. 

The Brazilian social system functioned through intertwined 
networks of patronage, familial relationships, and friendships. 
The state, capitalist economy, and institutions such as the 
church and the army developed within what historian Emilia 
Viotti da Costa has called, "the web of patronage." Contacts 
and favor rather than ability determined success in virtually all 
occupations. Brazilian society was, and still is, one in which a 
person could not advance without friends and family; hence, 
the continued importance of kinship networks (parentelas) , 
godfathers (compadres) and godmothers (comadres), and mili- 
tary school classes (turmas). Such a social system did not lend 
itself to reform. 

The 1870s and 1880s saw a crisis in each of the three pillars 
of the imperial regime — the church, the military, and the slave- 
holding system. Together, these crises represented the failure 
of the regime to adapt without alienating its base. In the 1870s, 
Rome pressured Brazil's Roman Catholic Church to conform 
to the conservative reforms of Vatican Council I, which 
strengthened the power of the pontiff by declaring him infalli- 
ble in matters of faith and morals. This effort by Rome to unify 
doctrine and practice worldwide conflicted with royal control 
of the church in Brazil. The crown had inherited the padroado, 



50 



Historical Setting 



or right of ecclesiastical patronage, from its Portuguese prede- 
cessor. This right gave the crown control over the church, 
which imperial authorities treated as an arm of the state. 
Although some clerics had displayed republican sentiments 
earlier in the century, a church-state crisis exploded in the mid- 
18708 over efforts to Europeanize the church. 

The importance of the military crisis is clearer because it 
removed the armed prop of the regime. After the Paraguayan 
War (1864-70), the monarchy was indifferent to the army, 
which the civilian elite did not perceive as a threat. The fiscal 
problems of the 1870s slowed promotions to a crawl, salaries 
were frozen, and officers complained about having to contrib- 
ute to a widows' fund from their meager salaries. Moreover, the 
soldiers in the ranks were considered the dregs of society, disci- 
pline was based on the lash, and training seemed pointless. 
The gulf between the military and the civilian oligarchies 
broadened. The political parties were as indifferent as the gov- 
ernment to demands for military reform, for obligatory mili- 
tary service, for better armament, and for higher pay and 
status. During the 1870s, the discontent was checked by the 
National Guard's reduced role; by an unsuccessful but wel- 
comed attempt to improve the recruitment system; and, espe- 
cially, by the cabinet service of war heroes, including the Duke 
of Caxias as prime minister (1875-78) and Marshal Manuel 
Luis Osorio, the Marquis of Herval, as minister of war (1878). 
But the latter died in 1879 and Caxias the year after, leaving 
leadership to officers less committed to the throne. The junior 
officer ranks were filled with men from the middle sectors who 
had entered the army to obtain an education rather than to fol- 
low a military career. They were more concerned than their 
predecessors with social changes that would open opportuni- 
ties to the lower middle class. 

The officer corps was split into three generations. The oldest 
group had helped suppress the regional revolts of the 1830s 
and 1840s, had fought in Argentina in 1852, and had survived 
the Paraguayan War. The numerous mid-level officers were bet- 
ter schooled than their seniors and had been tested in combat 
in Paraguay. The junior officers had missed the war but had the 
most education of the three groups and had experienced the 
empire only when its defects had become clearly apparent. 
They were the least attached to the old regime and the most 
frustrated by the lack of advancement in a peacetime army clut- 
tered with veterans of the great war. 



51 



Brazil: A Country Study 

Brazilian political tradition permitted officers to hold politi- 
cal office and to serve as cabinet ministers, thereby blurring 
the civil-military roles. As parliamentary deputies and senators, 
officers could criticize the government, including their military 
superiors, with impunity. In the 1880s, officers participated in 
provincial politics, debated in the press, and spoke in public 
forums. In 1884 a civilian minister of war attempted to impose 
order by forbidding officers to write or speak publicly about 
governmental matters. The subsequent punishments of offend- 
ing officers led Field Marshal Manuel Deodoro da Fonseca and 
General Jose Antonio Correia de Camara (Visconde de Pelo- 
tas) to head protests that eventually forced the minister to 
resign in February 1887 and the cabinet to fall in March 1888. 

Even as the church and military crises were unfolding, the 
slavery issue shook the support of the landed elite. Members of 
the Liberal and Conservative Parties came from the same social 
groups: plantation owners (fazendeiros) made up half of both, 
and the rest were bureaucrats and professionals. The ideologi- 
cal differences between the parties were trivial, but factional 
and personal rivalries within them made it difficult for the par- 
ties to adjust to changing social and economic circumstances. 
As a result, the last decade of the empire was marked by consid- 
erable political instability. Between 1880 and 1889, there were 
ten cabinets (seven in the first five years) and three parliamen- 
tary elections, with no Parliament able to complete its term. 
The repeated use of the moderating power provoked alien- 
ation, even among traditional monarchists. 

Attitudes toward slavery had shifted gradually. Pedro II 
favored abolition, and during the Paraguayan War slaves serv- 
ing in the military were emancipated. In 1871 the Rio Branco 
cabinet approved a law freeing newborns and requiring mas- 
ters to care for them until age eight, at which time they would 
either be turned over to the government for compensation or 
the owner would have use of their labor until age twenty-one. 
In 1884 a law freed slaves over sixty years of age. By the 1880s, 
the geography of slavery had also changed, and the economy 
was less dependent on it. Because of manumissions (many on 
condition of remaining on the plantations) and the massive 
flight of slaves, the overall numbers declined from 1,240,806 in 
1884 to 723,419 in 1887, with most slaves having shifted from 
the sugar plantations in the Northeast to the south-central cof- 
fee groves. But even planters in Sao Paulo, where the slave per- 
centage of the total population had fallen from 28.2 percent in 



52 



Historical Setting 



1854 to 8.7 percent in 1886, understood that to continue 
expansion they needed a different labor system. The provincial 
government therefore actively began subsidizing and recruit- 
ing immigrants. Between 1875 and 1887, about 156,000 arrived 
in Sao Paulo. Meanwhile, the demand for cheap sugarcane 
workers in the Northeast was satisfied by sertanejos (inhabitants 
of the sertdo) fleeing the devastating droughts of the 1870s in 
the sertdo. 

The economic picture was also changing. Slavery immobi- 
lized capital invested in the purchase and maintenance of 
slaves. By turning to free labor, planter capital was freed for 
investment in railroads, streetcar lines, and shipping and man- 
ufacturing enterprises. To some extent, these investments 
offered a degree of protection from the caprices of agriculture. 

Meanwhile, slaves left the plantations in great numbers, and 
an active underground supported runaways. Army officers peti- 
tioned the Regent Princess Isabel to relieve them of the duty of 
pursuing runaway slaves. Field Marshal Deodoro da Fonseca, 
commander in Rio Grande do Sul, declared in early 1887 that 
the military "had the obligation to be abolitionist." The Sao 
Paulo assembly petitioned the Parliament for immediate aboli- 
tion. The agitation reached such a pitch that to foreign travel- 
ers, Brazil appeared on the verge of social revolution. The 
system was coming apart, and even planters realized that aboli- 
tion was the way to prevent chaos. 

The so-called Golden Law of May 13, 1888, which ended sla- 
very, was not an act of great bravery but a recognition that sla- 
very was no longer viable. The economy revived rapidly after a 
few lost harvests, and only a small number of planters went 
bankrupt. Slavery ended, but the plantation survived and so 
did the basic attitudes of a class society. The abolitionists 
quickly abandoned those they had struggled to free. Many 
former slaves stayed on the plantations in the same quarters, 
receiving paltry wages. They were joined by waves of immi- 
grants, who often found conditions so unbearable that they 
soon moved to the cities or returned to Europe. No freedmen's 
bureaus or schools were established to improve the lives of the 
former slaves; they were left at the bottom of the socioeco- 
nomic scale, where their descendants remain in the 1990s. New 
prisons built after 1888 were soon filled with former slaves as 
society imposed other forms of social control, in part by rede- 
fining crime. 



53 



Brazil: A Country Study 

In the end, the empire fell because the elites did not need it 
to protect their interests. Indeed, imperial centralization ran 
counter to their desires for local autonomy. The republicans 
embraced federalism, which some saw as a way to counter the 
oligarchies, which used patronage and clientage to stay in 
power. In the early republic, however, they would find that the 
oligarchies adapted easily and used their accumulated power 
and skills to control the new governmental system. Taking 
advantage of cabinet crises in 1888 and 1889 and of rising frus- 
tration among military officers, republicans favoring change by 
revolution rather than by evolution drew military officers, led 
by Field Marshal Fonseca, into a conspiracy to replace the cabi- 
net in November 1889. What started as an armed demonstra- 
tion demanding replacement of a cabinet turned within hours 
into a coup d'etat deposing Emperor Pedro II. 

The Republican Era, 1889-1985 

The history of the republic has been a search for a viable 
form of government to replace the monarchy. That search has 
lurched back and forth between state autonomy and centraliza- 
tion. The constitution of 1891, establishing the United States of 
Brazil (Estados Unidos do Brasil), restored autonomy to the 
provinces, now called states. It recognized that the central gov- 
ernment did not rule at the local level, that it exercised control 
only through the local oligarchies. The empire had not 
absorbed fully the regional pdtrias, and now they reasserted 
themselves. Into the 1920s, the federal government in Rio de 
Janeiro would be dominated and managed by a combination of 
the more powerful pdtrias (Sao Paulo, Minas Gerais, Rio 
Grande do Sul, and to a lesser extent Pernambuco and Bahia). 
After the revolution of 1930, the trend would be strongly 
toward absorption of the pdtrias, reaching a peak in the New 
State (Estado Novo) of 1937-45. Centralization extended into 
the smallest remote villages as the nation-state's bureaucracy 
and power grew to previously unknown levels. Renewed auton- 
omy would come with the constitution of 1946 but would disap- 
pear under the military regime. The constitution of 1988 once 
again restored a degree of state autonomy but in the context of 
a powerful, all-embracing nation-state. In the 1990s, the pdtrias 
are more folkloric vestiges than autonomous centers of power. 

The history of the republic is also the story of the develop- 
ment of the army as a national institution. The elimination of 
the monarchy had reduced the number of national institutions 



54 



Historical Setting 



to one, the army. Although the Roman Catholic Church con- 
tinued its presence throughout the country, it was not national 
but rather international in its personnel, doctrine, liturgy, and 
purposes. By the time of the 1964 coup, the political parties 
were not national parties; they were oriented more along 
regional, personalist (personalism — see Glossary), and special- 
interest lines. Only in the struggle to reestablish civilian rule in 
the 1980s did a fitful process of creating national parties take 
shape. Thus, the army was the core of the developing Brazilian 
state, a marked change from the marginal role that it had 
played during the empire. The army assumed this new position 
almost haphazardly, filling part of the vacuum left by the col- 
lapse of the monarchy and gradually acquiring a doctrine and 
vision to support its de facto role. Although it had more units 
and men in Rio de Janeiro and Rio Grande do Sul than else- 
where, its presence was felt throughout the country. Its person- 
nel, its interests, its ideology, and its commitments were 
national in scope (see The Military Role in Society and Govern- 
ment, ch. 5). 

The republic's first decade was one of turmoil. It appears to 
be a pattern of Brazilian history that seemingly peaceful 
regime changes are followed by long periods of adjustment, 
often scarred by violence. Years of "regime change" in 1889, 
1930, and 1964 introduced protracted adjustment that 
involved some authoritarian rule. Curiously, because the vio- 
lence occurred over long periods, usually without overturning 
the government in Rio de Janeiro or Brasilia, Brazil acquired 
an undeserved reputation for having a nonviolent history of 
political and social compromise. 

The Old or First Republic, 1 889-1 930 

The founders of the Brazilian republic faced a serious ques- 
tion of legitimacy. How could an illegal, treasonous act estab- 
lish a legal political order? The officers who joined Field 
Marshal Deodoro da Fonseca in ending the empire were violat- 
ing solemn oaths to uphold emperor and empire. The officer 
corps would eventually resolve the contradiction by linking its 
duty and destiny to Brazil, the motherland, rather than to tran- 
sitory governments. In addition, the republic was born rather 
accidentally: Deodoro had intended only to replace the cabi- 
net, but the republicans manipulated him into fathering a 
republic. 



55 



Brazil: A Country Study 

The Brazilian republic was not a spiritual offspring of the 
republics born of the French or American revolutions, even 
though the Brazilian regime would attempt to associate itself 
with both. The republic did not have enough popular support 
to risk open elections. It was a regime born of a coup d'etat that 
maintained itself by force. The republicans made Deodoro 
president (1889-91) and, after a financial crisis, appointed 
Field Marshal Floriano Vieira Peixoto minister of war to ensure 
the allegiance of the military. Indeed, the Brazilian people 
were bystanders to the events shaping their history. In the last 
decades of the nineteenth century, the United States, much of 
Europe, and neighboring Argentina expanded the right to 
vote. Brazil, however, moved to restrict access to the polls. In 
1874, in a population of about 10 million, the franchise was 
held by about 1 million, but in 1881 this had been cut to 
145,296. This reduction was one reason the empire's legitimacy 
foundered, but the republic did not move to correct the situa- 
tion. By 1910 there were only 627,000 voters in a population of 
22 million. Throughout the 1920s, only between 2.3 percent 
and 3.4 percent of the total population voted. 

The instability and violence of the 1890s were related to the 
absence of consensus among the elites regarding a governmen- 
tal model; and the armed forces were divided over their status, 
relationship to the political regime, and institutional goals. 
The lack of military unity and the disagreement among civilian 
elites about the military's role in society explain partially why a 
long-term military dictatorship was not established, as some 
officers advocating positivism (see Glossary) wanted. However, 
military men were very active in politics; early in the decade, 
ten of the twenty state governors were officers. 

The Constituent Assembly that drew up the constitution of 
1891 was a battleground between those seeking to limit execu- 
tive power, which was dictatorial under President Deodoro da 
Fonseca, and the Jacobins, radical authoritarians who opposed 
the Paulista coffee oligarchy and who wanted to preserve and 
intensify presidential authority. The new charter established a 
federation governed supposedly by a president, a bicameral 
National Congress (Congresso Nacional; hereafter, Congress), 
and a judiciary. However, real power was in the regional pdtrias 
and in the hands of local potentates, called "colonels" ( coronets', 
coronelismo — see Glossary). Thus, the constitutional system did 
not work as that document had envisaged. It would take until 
the end of the decade for an informal but real distribution of 



56 



Historical Setting 



power, the so-called politics of the governors, to take shape as 
the result of armed struggles and bargaining. 

Article 14 on the military was particularly important for the 
future. It declared the army and navy to be permanent national 
institutions responsible for maintaining law and order and for 
ensuring the continuance of the three constitutional powers. 
Officers insisted on the statement of permanent status because 
they feared that the elites would disband their services. The 
armed forces were to be the moderator of the system, and mili- 
tary officers were Brazil's only constitutionally mandated elite. 
The article also required the military to be obedient to the 
president but "within the limits of the law." Thus, the armed 
forces were to obey only if they determined a presidential 
order to be legal. Oddly, military officials were less than enthu- 
siastic about discretionary obedience, which they saw as subver- 
sive; the civilian politicians, however, wanted it as a check on 
presidential power. Interestingly, the constitutions of 1934 and 
1946 kept the discretionary clause unaltered. However, the 
1937 constitution of the dictatorial Estado Novo, which was a 
military regime in civilian dress, put the military securely 
under obedience to the president. 

In the election that followed the adoption of the new consti- 
tution in 1891, Deodoro da Fonseca and Floriano Peixoto were 
elected president and vice president, respectively, but with the 
former gaining only 129 votes and the latter 153. The first pres- 
ident, Deodoro da Fonseca, had difficulty adjusting to sharing 
power with Congress and, in imperial fashion, dissolved it in 
November 1891, provoking rebellions in the navy and in Rio 
Grande do Sul. To mollify the opposition, he resigned in favor 
of Vice President Peixoto (acting president, 1891-94). Peixoto, 
known as the "Iron Marshal" (marechal de ferro), ousted all the 
state governors who had supported Deodoro, provoking vio- 
lence in many parts of the country. One of the bloodiest of 
these struggles was the civil war that exploded in Rio Grande 
do Sul in 1893 and soon spread into Santa Catarina and 
Parana, pitting former monarchist liberals against republicans. 
Concurrently, the fleet in Guanabara Bay at Rio de Janeiro 
challenged Peixoto, and the naval revolt quickly became linked 
to the struggle in the South. Peixoto's diplomat in Washington, 
Salvador de Mendonca, with the help of New York businessman 
Charles Flint, was able to assemble a squadron of ships with 
American crews, which proved decisive in ending the standoff 
in Guanabara Bay. The United States government, interested 



57 



Brazil: A Country Study 

in Brazilian commerce and in the republic's survival, permitted 
this mercenary effort to occur and sent several cruisers to pro- 
vide a barely concealed escort. This was the first documented 
American intervention in Brazil's internal affairs, and signifi- 
cantly it was organized privately. 

Deodoro da Fonseca's dissolution of Congress, his resigna- 
tion, Peixoto's assumption of power, and the outbreak of civil 
war split the officer corps and led to the arrest and expulsion 
of several senior officers. Although the power struggles that 
produced the fighting in Rio Grande do Sul during 1893-95 
were local in origin, Peixoto made them national by siding with 
republican Governor Julio de Gastilhos. The savage combat 
and the execution of prisoners and suspected sympathizers, in 
what historian Jose Maria Bello called the "crudest of Brazil's 
civil wars," was shameful on both sides. Peixoto's fierce defense 
of the republic made him the darling of the Jacobins and from 
then on a symbol of Brazilian nationalism. In November 1894, 
because of his ill health (he died in 1895) and the military's dis- 
unity, Peixoto turned the government over to a spokesman for 
the agrarian coffee elite, Sao Paulo native Prudente Jose de 
Morais Barros, also known as Prudente de Morais, the first civil- 
ian president (1894-98). Prudente de Morais negotiated an 
end to the war in the South and granted amnesty to the rebels 
and the expelled officers. He weakened the army's staunchest 
republicans and sought to lower the military's political weight. 
He promoted officers committed to creating a professional 
force that would be at the disposal of the national authorities, 
who would determine how it was to be employed. A General 
Staff (Estado Geral), established in 1896 on the German 
model, was to shape this new army. 

However, before the new army could take shape, it was used 
in 1897 to destroy the religious community of Canudos in the 
sertdo of Bahia, which the Jacobins thought mistakenly was a 
hot-bed of monarchist sedition. The Rio de Janeiro govern- 
ment, which saw monarchists everywhere, threw a force of 
9,500 against a population of perhaps 30,000. Some 4,193 sol- 
diers were wounded between July and October 1897, and the 
townspeople were killed, taken prisoner, or fled. Canudos was 
erased in the same fashion that Indian villages had been and 
continued to be erased. Although the campaign's symbolic 
value as a defense of the republic faded as the reality became 
known, it remained a powerful warning to marginal (marginal- 
ity — see Glossary) folk throughout Brazil that they would not 



58 



Naval station, Guanabara Bay, Rio de Janeiro 
Courtesy Patricia A. Ktuck 

be permitted to challenge the hierarchical order of society. In 
this sense, Canudos was a step in creating mechanisms of social 
control in the postslavery era. 

Canudos affected the political scene immediately when a 
returning soldier, the foil in a high-level Jacobin conspiracy, 
attempted to assassinate President Prudente de Morais but 
killed the minister of war instead, thereby acting as a catalyst 
for rallying support for the government. The abortive assassina- 
tion made possible the election of Manuel Ferraz de Campos 
Sales (president, 1898-1902). In the army, the attempt consoli- 
dated the hold of generals who opposed Floriano Peixoto and 
were interested in professionalizing the institution. 

The turmoil of the 1890s and particularly Canudos sus- 
pended the military's capability to exercise the moderating 
role that it supposedly inherited from the monarchy. By 1898 
the rural-based regional oligarchies had regained command of 
the political system. Their fiscal policies reflected their belief 
that Brazil was an agricultural country whose strength was in 
supplying Europe and North America with coffee, rubber, 
sugar, tobacco, and many natural resources. Brazil produced 75 
percent of the world's coffee. With competition increasing, 
however, prices fell continually, causing the government to 



59 



Brazil: A Country Study 

devalue the currency against the British pound. This devalua- 
tion forced up the price of imported goods, thus lowering con- 
sumption and government tax revenues from imports. Those 
shortfalls led to suspension of payments on the foreign debt, 
and the generally poor economy caused half of the banks to 
collapse. The oligarchy responded to the situation by attempt- 
ing to preserve its own position and by limiting national indus- 
try and infrastructure to that necessary to support the 
agricultural economy. The society that the economy underlay 
was one in which the elites regarded the majority of the people 
merely as cheap labor. The elites encouraged immigration to 
keep labor plentiful and inexpensive, although they also 
wanted to "whiten" the population. They considered public 
education of little use and potentially subversive. 

The political system that took shape at the beginning of the 
twentieth century had apparent and real aspects. There was the 
constitutional system, and there was the real system of unwrit- 
ten agreements (coronelismd) among local bosses, the colonels. 
Coronelismo, which supported state autonomy, was called the 
"politics of the governors." Under it, the local oligarchies chose 
the state governors, who in turn selected the president. 

The populous and prosperous states of Minas Gerais and Sao 
Paulo dominated the system and swapped the presidency 
between them for many years. The system consolidated the 
state oligarchies around families that had been members of the 
old monarchial elite. And to check the nationalizing tenden- 
cies of the army, this oligarchic republic and its state compo- 
nents strengthened the navy and the state police. In the larger 
states, the state police were soon turned into small armies; in 
the extreme case of Sao Paulo, French military advisers were 
employed after 1906. 

The "politics of the governors" kept a relative peace until the 
end of World War I. Urban Brazil, the one foreigners saw from 
the decks of ships, prospered. But there was no integrated 
national economy. Rather, Brazil had a grouping of regional 
economies that exported their own specialty products to Euro- 
pean and North American markets. The absence of overland 
transportation, except for the mule trains, impeded internal 
economic integration, political cohesion, and military effi- 
ciency. The regions, "the Brazils" as the British called them, 
moved to their own rhythms. The Northeast exported its sur- 
plus cheap labor and saw its political influence decline as its 
sugar lost foreign markets to Caribbean producers. The wild 



60 



Historical Setting 



rubber boom in Amazonia lost its world primacy to efficient 
Southeast Asian colonial plantations after 1912. The national- 
oriented market economies of the South were not dramatic, 
but their growth was steady and by the 1920s allowed Rio 
Grande do Sul to exercise considerable political leverage. Real 
power resided in the coffee-growing states of the Southeast 
(Sudeste) — Sao Paulo, Minas Gerais, and Rio de Janeiro — 
which produced the most export revenue. Those three and Rio 
Grande do Sul harvested 60 percent of Brazil's crops, turned 
out 75 percent of its industrial and meat products, and held 80 
percent of its banking resources. 

One factor that eventually would draw "the Brazils" closer 
together was the heightened sense of nationalism that devel- 
oped among the urban middle and upper classes before World 
War I. This sense of nationalism can be explained partially by 
the Brazilian elite's focus on Rio de Janeiro as the center of 
their world. Although the national government was weak, it was 
still the source of prestige and patronage. Rio's sanitation 
projects and its remodeled downtown (1903-04) were soon 
copied by state capitals and ports. 

The elites had reason to think that Brazil's status in the 
world was rising. In 1905 the archbishop of Rio de Janeiro 
received Latin America's first cardinalate. Brazil hosted the 
Third Pan-American Conference, raised its Washington lega- 
tion to an embassy (1904), sent a notable delegation to the Sec- 
ond Hague Peace Conference (1907), gained possession via 
arbitration of hundreds of thousands of square kilometers of 
disputed territory, established the Indian Protective Service, 
tied together the far reaches of the country via telegraph, and 
purchased two of the world's largest dreadnoughts for its navy. 
Many cheered writer Afonso Celso when he asserted that the 
era was "the dawn of our greatness .... We will be the second 
or first power of the world." 

However, the enthusiasm was not sufficient to overcome the 
resistance of Brazilians of all levels to military service. When an 
Obligatory Military Service Law was enacted in 1908, it went 
unenforced until 1916. Military service was unappealing 
because members were called on continually to take up arms. 
During the presidency of Marshal Hermes Rodrigues da Fon- 
seca (1910-14), nephew of Deodoro da Fonseca, turmoil 
spread across Brazil. In 1910 sailors protesting extreme physi- 
cal punishments in the navy seized the new dreadnoughts Sao 
Paulo and Minas Gerais and some smaller vessels in the bay at 



61 



Brazil: A Country Study 



Rio de Janeiro and threatened to bombard the city. Hermes da 
Fonseca was forced to grant the rebels their demands and to 
give them amnesty. 

The image of national stability with which the earlier Cam- 
pos Sales administration had tried to dazzle foreign bankers 
also was shattered by a series of military interventions, known 
as the Salvations, that replaced a number of state governments. 
The national government, somewhat against Hermes da Fon- 
seca's inclination, sponsored what amounted to coups d'etat 
against state governments in Sergipe, Pernambuco, Alagoas, 
Para, Piaui, Bahia, and Ceara. In disorderly fashion, one oligar- 
chic alliance substituted for another, often with an army officer 
in charge. In the disastrous case of Bahia, the local army com- 
mander bombarded the governor's palace and surrounding 
buildings. In 1911 Sao Paulo's French-trained Public Force 
(Forca Publica) and civilian Patriotic Battalions saved the city 
from similar federal intervention. 

Struggling to keep control of the army, Hermes da Fonseca 
replaced the minister of war three times in sixteen months and 
forced the retirement of about 100 colonels and generals. But 
to keep them from rebelling, they were all retired at higher 
ranks and salaries. The Brazilian political system was not so 
much one of compromise as of co-optation. With this internal 
army purge, the Salvationist Movement spent itself, and the 
tide turned away from federal military interventions to replace 
dominant regional oligarchies toward neutrality or preserving 
the status quo. The movement can be seen as a messy attempt 
to reduce state autonomy and to heighten the power of the 
central government. 

Meanwhile, the vision of Brazilian order and progress as 
seen by the urban elite, intellectuals, and newspaper editorials 
was challenged again by the supposedly anarchic sertdo, this 
time in the South. In August 1914, as world attention focused 
on the outbreak of war in Europe, a very different conflict 
burst forth in the Contestado region of Santa Catarina. A popu- 
lar rebellion, also known as the Contestado, confronted the 
"coloneT'-dominated socioeconomic and political system. 
Where the Salvationist Movement aimed at substituting one oli- 
garchy for another, the Contestado rebels rejected the national 
system and wanted to remake their part of the Brazilian reality. 
As with Canudos, the response of state and federal authorities 
was pulverizing violence. 



62 



Historical Setting 



The region's economy was based on livestock, the collection 
of mate, and lumbering. Its social structure concentrated 
wealth and power in the hands of a few "colonels," around 
whom lesser landowners were arrayed. Most families lived at 
the sufferance of those men or had shaky land titles. A jurisdic- 
tional dispute between Santa Catarina and Parana arose 
because each state issued deeds to the same land. The no- 
man's-land attracted fugitives from throughout Brazil. The con- 
struction of the Sao Paulo-Rio Grande do Sul Railroad and the 
timbering and colonization operations of United States capital- 
ist Percival Farquhar added foreign elements to the already vol- 
atile mix. The Brazil Railroad and the Southern Brazil Lumber 
and Colonization Company forced Brazilians off their expro- 
priated lands, imported European immigrants, and sawed away 
at virgin pine, cedar, and walnut trees. People whose families 
had lived in the region for a century suddenly saw their lands 
rented or sold to others. As if that were not enough, in 1910 
the threat of war with Argentina loomed, and authorities 
speeded the railroad's construction and expanded labor crews 
to about 8,000. In this environment of tumultuous destruction 
of the forests, social tensions rose with evictions and the sud- 
den introduction of foreigners and modern technology. The 
local "colonels" secured their own interests, abandoning their 
customary paternalism and leaving the mass of people adrift. 
The Contestado was afflicted with a collective identity crisis, 
which caused many to turn to messianic religion as solace. 

The people of the Contestado followed a local healer, 
Miguel Lucena Boaventura, known as Jose Maria, who soon 
died in a confrontation with Parana Military Police. His follow- 
ers refused to accept his death, however, and believed that he 
was either alive or would rise again. His story mixed with the 
Luso-Brazilian belief in supernatural assistance in desperate 
times. This phenomenon, called Sebastianism, transformed the 
submissive population, accustomed to acting only with the 
"colonel's" approval, into a resolute fighting force. Their 
attacks on the railway and lumbering operations and the fail- 
ure of negotiations with federal authorities led to an escalation 
of hostilities in 1912 and a fierce military campaign that in 
1915 involved 6,000 troops, modern artillery and machine 
guns, field telephones and telegraph, and the first use of air- 
craft in a Brazilian conflict. The fighting was spread over a wide 
area, and the many redoubts of about 20,000 "fanatics," as the 
army called them, made suppression slow and difficult and also 



63 



Brazil: A Country Study 

revealed the military's weaknesses. The number of casualties 
was uncertain but sizeable, and henceforth the army main- 
tained a garrison in the region. The Gontestado was subdued 
by the end of 1917. 

Army reformers, a key group of whom returned from train- 
ing in Germany by the end of 1913, wrote commentaries on the 
campaign in the new military monthly, A Defesa Nacional They 
regarded the Contestado as "an inglorious conflict that discred- 
ited our arms." They blamed the republic for its "lack of ele- 
vated political norms, the abandonment of thousands of 
Brazilians . . . segregated from national society by the lack of 
instruction, by the scarcity of easy means of communication, by 
the want of energy, and by the poverty of initiative that, unhap- 
pily, has characterized the administrations generally since the 
time of the monarchy." They warned military leaders that "the 
lesson of the Contestado" was that the army's passivity in 
accepting poorly conceived political measures would only dam- 
age it "morally" and would bring Brazil "the most funereal con- 
sequences." 

The Contestado joined Canudos as an important compo- 
nent in the army's institutional memory. Veterans played mean- 
ingful roles in military and national affairs in the next decades. 
Within a few years, the reformist critique would be part of the 
thinking that underlay the tenente or lieutenants' revolts of the 
1920s, beginning with the Copacabana Revolt in 1922. The Sal- 
vationist Movement and the Contestado drew the army and the 
central government deeply into the internal affairs of the 
states, thereby whittling away at their coveted autonomy. The 
era's legacy of political intervention and suppression of dissent 
muddied the army's mission and self-image, but it amplified 
the power of the central government (Rio de Janeiro). 

The growing power of Rio de Janeiro was reflected in Brazil- 
ian foreign affairs under the guidance of Jose Maria da Silva 
Paranhos, the Baron of Rio Branco, who served as foreign min- 
ister from 1902 to 1912, under presidents Francisco de Paula 
Rodrigues Alves (acting president, 1902-3; president, 1903-6), 
and Afonso Pena (1906-9), Acting President Nilo Pecanha 
(1909-10), and President Hermes da Fonseca. His vision 
shaped both the boundaries of the country and the traditions 
of Brazilian foreign relations. In the heyday of international 
imperialism, he was instrumental in negotiating limits over 
which the great powers were not to intrude. He argued for mil- 
itary reform to back up energetic diplomacy, and he began the 



64 



Historical Setting 



process of moving Brazil out of the British orbit and into that 
of the United States. The latter was taking half of Brazil's total 
exports by 1926, but Brazil still owed Britain over US$100 mil- 
lion in the mid-1920s. British banks financed the country's 
international commercial exchange, and British investors pro- 
vided 53 percent of the total foreign investment until 1930. But 
by the late 1920s, United States banks held nearly 35 percent of 
the foreign debt. Rio Branco's goal, which was pursued by his 
successors, was to diffuse the country's dependency among the 
powers so that none could intervene without being checked by 
another. Trade and financial ties with the United States were 
increased at British expense, and these would be balanced by 
military links with Germany and then France. France would 
continue for decades to provide a cultural model for the elites. 

The Rio Branco years were the basis for what became known 
as the Itamaraty tradition (named after the building that 
housed the Ministry of Foreign Affairs in Rio de Janeiro), but 
not every administration grasped its purpose. Some confused 
its tactical aspects — reliance on foreign loans and investments, 
Pan-Americanism, and alliance with the United States — with its 
essential substance, the quest for independence and national 
greatness. 

World War I found Brazil with nearly half of its army commit- 
ted in the Contestado. The war in Europe was traumatic for the 
army, which was then beginning a reorganization under the 
influence of thirty-two officers who had recently returned from 
service in German army units. A German military mission had 
been expected, but pressure from Sao Paulo and from Paris 
resulted in a mission contract with France instead. Economics, 
Washington's decision to enter the war, and German subma- 
rine attacks on Brazilian merchant ships pulled Brazil into the 
conflict on the Allied side. The military mobilized, but the gen- 
erals, feeling over-committed and ill-prepared, declined to 
send troops to Europe. 

Pan-Americanism provided some outlet for Brazil's interna- 
tional status pretensions, but the period between the world 
wars often found its neighbor Argentina suspicious of harmless 
improvements in Brazil's armed forces. Brazil's obligatory mili- 
tary service, its construction of new barracks, its purchases of 
modern weapons, and its contracts for a French military mis- 
sion and a United States naval mission were viewed by military 
officials in Buenos Aires as threatening. Brazilian leaders 
wanted their country regarded as the most powerful in South 



65 



Brazil: A Country Study 



America but understood that the public would not accept, and 
the constitution outlawed, a war of aggression. Regardless of 
what the Argentines thought, the military was not prepared to 
wage a foreign war. Tension between Argentina and Brazil and 
maneuvering for greater influence in Paraguay and Uruguay 
have been characteristic of their relations since the War of the 
Triple Alliance. 

The interwar years in Brazil saw an increase in labor agita- 
tion as the economy expanded, industrialization and urbaniza- 
tion stepped up, and immigrants flowed into the country. 
Coffee overproduction by the turn of the century had pro- 
voked subsidization programs at the state and national levels 
that helped the planters but could not prevent the decline in 
the economy's capacity to pay for imported manufactured 
goods. Local industry began to fill the gap. World War I 
restricted trade further, and Brazilian industrial production 
increased substantially. The government stressed the need for 
more industrial independence from foreign producers and 
stimulated import substitution, particularly in textiles. Many of 
the factories were small, with an average of twenty-one workers. 
In 1920 about a million urban workers were concentrated in 
Rio de Janeiro and Sao Paulo. Brazil was just beginning to 
develop its industrial base, but it was still mainly an agricultural 
country with 6.3 million people working the soil. 

The living conditions of urban workers were bad. Housing, 
transportation, sewerage, and water supply trailed far behind 
the rapid population growth and produced serious public 
health problems. The clean-up campaigns at the beginning of 
the century struck at the high incidence of yellow fever, 
malaria, and smallpox in Rio de Janeiro, Santos, and North- 
eastern seaports. The city centers were made safer, but the 
workers who crowded into sordid "beehives" (cortiQOS — small 
crowded houses) and favelas (shantytowns) suffered all sorts of 
ailments. 

The federal and state governments subsidized immigration 
from Italy, Portugal, Spain, Germany, and Japan to provide 
workers for the coffee plantations. However, many immigrants 
soon fled the rough conditions in the countryside for better 
opportunities in the cities. They flooded the labor pools, mak- 
ing it difficult for unions to force factory owners to pay better 
wages. Women, who were the majority of workers in the textile 
and clothing industries, were frequently active in organizing 
factory commissions to agitate for improved conditions, free- 



66 



Historical Setting 



dom from sexual abuse, and higher pay. Strikes had occurred 
in 1903, 1906, and 1912, and in 1917 general strikes broke out 
in Rio de Janeiro, Sao Paulo, Recife, Santos, and Porto Alegre. 
Because the mentality of the industrialists was rooted in the sla- 
very era and emphasized their well-being over that of the com- 
monwealth and because they functioned on a thin profit 
margin, they tended to fire workers for striking or joining 
unions. The industrialists also blacklisted troublemakers, 
employed armed thugs to keep control inside and outside the 
factories, and called on the government to repress any sign of 
labor organization. There were no large massacres of strikers, 
as occurred in Mexico and Chile, but the physical violence was 
marked. 

Some advocates of reform were heard. For example, eco- 
nomic nationalists like Roberto Simonsen argued for improved 
pay incentives to prevent individual workers from unionizing. 
During the 1920s, the Roman Catholic Church, as part of its 
effort to revive its status, organized the Young Catholic Workers 
and preached the example of the Holy Family accepting "the 
will of Providence, in pain and in happiness." By 1930 church 
societies, private charities, factory-sponsored recreational 
clubs, and government agencies strove for more control over 
workers' organizations and leisure time. 

During the Old Republic, Brazil changed at a frightening 
rate. As its population increased 162 percent between 1890 and 
1930, it became more urbanized and industrialized, and its 
political system was stretched beyond tolerance. Concern over 
the resurgence of labor activity in the late 1920s was one of the 
factors that led to the collapse of the Old Republic in 1930 and 
to the subsequent significant change in labor and social policy. 

The Era of Getulio Vargas, 1930-54 

Just as the 1889 regime change led to a decade of unrest and 
painful adjustment, so too did the revolts of 1930. Provisional 
President Getulio Dorneles Vargas ruled as dictator (1930-34), 
congressionally elected president (1934-37), and again dicta- 
tor (1937-45), with the backing of his revolutionary coalition. 
He also served as a senator (1946-51) and the popularly 
elected president (1951-54). Vargas was a member of the gau- 
cho-landed oligarchy and had risen through the system of 
patronage and clientelism, but he had a fresh vision of how 
Brazilian politics could be shaped to support national develop- 
ment. He understood that with the breakdown of direct rela- 



67 



Brazil: A Country Study 

tions between workers and owners in the expanding factories 
of Brazil, workers could become the basis for a new form of 
political power — populism. Using such insights, he would grad- 
ually establish such mastery over the Brazilian political world 
that he would stay in power for fifteen years. During those 
years, the preeminence of the agricultural elites ended, new 
urban industrial leaders acquired more influence nationally, 
and the middle class began to show some strength. 

Tenentismo, or the lieutenants' rebellion against the army and 
governmental hierarchies, faded as a distinctive movement 
after 1931, in part because its adherents promoted the preser- 
vation of state autonomy when the trend toward increased cen- 
tralization was strong. Individual lieutenants continued to 
exercise important roles, but they made their peace with the 
traditional political forces. In 1932 Sao Paulo, whose interests 
and pride suffered under the new regime, rose in revolt. The 
three-month civil war saw many officers who had lost out in 
1930 or were otherwise disgruntled join the Paulistas, but fede- 
ral forces defeated them. 

A new constitution in 1934 reorganized the political system 
by creating a legislature with both state and social-sector repre- 
sentatives. It contained some electoral reforms, including 
women's suffrage, a secret ballot, and special courts to super- 
vise elections. The Constituent Assembly elected Vargas presi- 
dent for a four-year term. However, the attempt to harness the 
revolution to the old system, somewhat remodeled, would soon 
fail completely and take Brazil into prolonged dictatorship. 
The left helped in that process by becoming a creditable 
threat. On misguided instructions from Moscow based on mis- 
information from Brazil, the Brazilian communists, led by a 
former tenente, staged a revolt in 1935, but it was rapidly sup- 
pressed. 

In the 1930s, the civilian elites feared that Brazil would suf- 
fer a civil war similar to Spain's, and so for the first time in Bra- 
zilian history they supported a strong, unified military. The 
Estado Novo gave the army its long-held desire for control over 
the states' Military Police (Policia Militar) units. The elites of 
the old state pdtrias gave up their independent military power 
in return for federal protection of their interests. This process 
was not always a willing one, as the Paulista revolt of 1932 
showed, but federal monopoly of military force escalated the 
power of the central government to levels previously unknown. 



68 



Historical Setting 



A significant turning point in the history of Brazil had been 
reached. 

Under the Estado Novo, state autonomy ended, appointed 
federal officials replaced governors, and patronage flowed 
from the president downward. All political parties were dis- 
solved until 1944, thus limiting opportunities for an opposition 
to organize. In the process, Vargas eliminated threats from the 
left and the right. At the local level, "colonels" survived by 
declaring their loyalty and accepting their share of patronage 
for distribution to their own underlings. The Vargas years had 
their greatest impact on national politics and economics and 
their least impact at the local level where the older forms of 
power continued well into the 1950s. Even in the 1990s, local 
political bosses were tagged "colonels." Vargas took care to 
absorb the rural and commercial elites into his power base. He 
had the ability to make former enemies supporters, or at least 
neutrals. 

The Vargas years saw the reorganization of the armed forces, 
the economy, international trade, and foreign relations. The 
government restored the old imperial palace in Petropolis and 
encouraged the preservation of historic buildings and towns. 
The average annual rise in the gross domestic product (GDP — 
see Glossary) was nearly 4 percent. Brazil's first steel mill at 
Volta Redonda (1944) was the start of the great industrial out- 
put of the second half of the century. The 1930-45 era added 
corporatism (see Glossary) to the Brazilian political lexicon. 

Even as it channeled investment into industry, the Estado 
Novo classified strikes as crimes and grouped the government- 
controlled unions into separate sector federations that were 
not allowed to form across-the-board national organizations. 
The idea was to keep the lines of control vertical (vertical inte- 
gration — see Glossary) . The government decreed regular wage 
and benefits increases and slowly expanded an incomplete 
social security system. Its minimum wage levels were never satis- 
factory. The regime's propaganda touted state paternalism and 
protection and depicted Vargas as the benefactor of the work- 
ing classes. He also was the benefactor of the factory owners, 
who saw industry expand 11.2 percent a year throughout the 
1930s, which meant that it more than doubled during the 
decade. Indeed, growth and repression were the twin orders of 
the day. Journalists and novelists were censored, jailed, and dis- 
couraged. The army restricted access to the military schools to 



69 



Brazil: A Country Study 

those with acceptable racial, familial, religious, educational, 
and political characteristics. 

As a result of these repressive measures, the suspension of 
political activities, and the government's support of rearming 
and modernizing the military, the army gained a coherence 
and unity that it had not experienced since before 1922. The 
popular status that the army won by participating in the Italian 
campaign (1944-45) of World War II also permitted the High 
Command, under General Pedro Aurelio de Goes Monteiro, a 
long-time supporter of Vargas, to step into the successionist cri- 
sis of October 1945 to depose Vargas and to cut short the polit- 
ical mobilization of the masses that the generals believed would 
upset the social order. Not to have acted would have violated 
the implicit agreement made with the elites when the latter sur- 
rendered their independent state military forces to federal 
control. 

The elected government over which President Eurico Gas- 
par Dutra presided from 1946 to 1951 opened under the 
decree laws of the Estado Novo and continued under the new 
constitution of 1946. This charter reflected the strong conser- 
vative tendency in Brazilian politics by incorporating ideas 
from the constitution of 1934 and the social legislation of the 
Estado Novo. Over the next years, the various cabinet changes 
traced the government's steady movement toward the right. 
The Dutra administration was supported by the same conserva- 
tive interventionist army that had backed the previous regime. 
Indeed, Dutra, who though retired from active duty, was inau- 
gurated in his dress uniform and was promoted to general of 
the army and then to marshal while in office, made the point 
that he still belonged to the military class (classe militar), that 
he would not neglect its needs, and that he would guide the 
army politically. 

More dispassionate observers see the ending of Vargas's pro- 
ductive leadership — during which the average annual rise in 
the GDP was nearly 4 percent — as the reaction of the landown- 
ing and business elite allied with the urban middle class against 
the processes of change. Dutra's years in office displayed a min- 
imal level of state participation and intervention in the econ- 
omy. It was indeed ironic that the man who led Brazil through 
the first steps of its "experiment with democracy" was a general 
who, in the early years of World War II, was so antiliberal that 
he had opposed aligning Brazil with the democratic countries 
against Nazi Germany. He was a fervent anticommunist, who 



70 



Historical Setting 



quickly broke the diplomatic ties Vargas had established with 
the Soviet Union, outlawed the Brazilian Communist Party, and 
supported the United States in the opening phases of the Cold 
War. He exchanged official visits with President Harry S. Tru- 
man and sought American aid for continued economic devel- 
opment. 

Dutra's government improved the railways, completed con- 
struction of roads that connected Rio de Janeiro to Salvador 
and Sao Paulo, and expanded the electrical generating and 
transmission systems. It also cooperated with the states in build- 
ing more than 4,000 new rural schools and supported con- 
struction of new university buildings in various states. In 1951 it 
also created the National Research Council (Conselho Nacio- 
nal de Pesquisas — CNPq), which would be important in devel- 
oping capabilities and university faculties in coming decades 
(see Science and Technology as Modernization, 1945-64, ch. 
6). His mandate was marked by heated disputes over the 
nationalization of oil and plans for an international institute to 
study Amazonia. The latter were shelved amidst emotional 
charges that they would lead to the loss of half of the national 
territory; and the campaign for the former was suppressed vio- 
lently 

Dutra's military program included domestic arms produc- 
tion, sending many officers for training in the United States, 
expanding air force and naval schools and modernizing their 
equipment, and establishing the War College (Escola Superior 
de Guerra — ESG), which played such an important role in the 
political crises of the 1960s. Although Dutra could be criticized 
for not containing inflation and for allowing an importing 
frenzy that soon exhausted the savings of the war years, he 
managed to govern without declaring a state of siege, and he 
was the first elected president since 1926 to pass the office to 
his elected successor. 

As a candidate for president in the 1950 elections, Vargas 
advocated accelerating industrialization and expanding social 
legislation, and he was rewarded with a sizeable 49 percent of 
the vote. Vargas's attempts to base his elected government 
(1951-54) firmly on populism induced military, elite, and 
United States fears of nationalism. Even so, it was a period of 
deepening political polarization. Anticommunist military offic- 
ers saw red in every attempt to expand labor's influence and 
objected to wage increases for workers when the value of their 
own salaries was eroding steadily. The United States refused 



71 



Brazil: A Country Study 

economic assistance that Brazilian leaders believed they 
deserved for providing bases, natural resources, and troops 
during World War II. The lack of postwar benefits, especially 
for the service of the Brazilian Expeditionary Force (Forca 
Expedicionaria Brasileira — FEB), caused Vargas and part of 
the military to reject the idea of sending troops to fight in 
Korea. 

Although the United States government did not want to pro- 
vide economic aid, it also did not want the Brazilian govern- 
ment to take an active role in developing the country's 
resources. Washington's desire to secure Brazil as a safe place 
for private United States investment clashed with Brazil's treat- 
ment of foreign-owned utilities. Foreign interests had been too 
slow in developing energy resources, so the Vargas government 
created the Brazilian Petroleum Corporation (Petroleo 
Brasileiro S.A. — Petrobras) in 1953 and the Brazilian Electric 
Power Company (Centrais Eletricas Brasileiras S.A. — Eletro- 
bras) in 1961. The "Petroleum is Ours!" campaign of the 
nationalists caused arguments within the military over what was 
best to do. Some officers embraced the antistatist attitude that 
Washington was sponsoring. The bitterly fought, emotional 
debate over the creation of Petrobras poisoned political life 
and contributed to the subsequent military interventions. The 
Vargas administration dissolved in frustration and charges of 
corruption; faced with military demands for his resignation, 
Vargas shot himself on August 24, 1954. His death produced 
considerable public sympathy, which in turn strengthened his 
reputation as "father of the poor." His influence in Brazilian 
politics was felt for decades. 

The Post- Vargas Republic, 1954-64 

If corporatism was the hallmark of the 1930s and 1940s, pop- 
ulism, nationalism, and developmentalism characterized the 
1950s and early 1960s. Each of these contributed to the crisis 
that gripped Brazil and resulted in the authoritarian regime 
after 1964. At the core of the crisis was the continued unwilling- 
ness of the elite to share the benefits of Brazil's wealth with the 
majority of the people. By the early 1960s, the crisis was boiling 
in reverse, from the top down. The crisis had much more to do 
with elite fears of a mass uprising, supposedly instigated by 
international communism, than with the reality of social revo- 
lution. They, rather than the masses, believed the fiery rhetoric 
of leftist-populist politicians. What elites elsewhere might have 



72 



Historical Setting 



seen as popular democratic mobilization, the Brazilian elites 
saw as revolutionary change that threatened their well-being. 
Because they portrayed their well-being as the same as the 
national well-being, and because they controlled the state and 
the instruments of power, they responded with a counterrevo- 
lution, what historian Joseph Page labeled "the revolution that 
never was." 

Labor became more active in seeking to improve the status 
of the working class, and the population continued to grow 
beyond the state's ability to expand educational and social ser- 
vices. As a result, conservative elites feared that they were los- 
ing control of politics and of the state. The elites had opposed 
Vargas because he sought to use the state to spread benefits 
more broadly. The middle classes tended to identify with elite 
visions of society and to see the lower classes as a threat. Curi- 
ously, the term povo (people), which had meant the lowest 
class, the destitute, the squatters, the rural poor, had changed 
by the early 1950s to mean the politically active and economi- 
cally mobile urban lower classes. Further, politicians appealed 
to the povo during election campaigns but once elected 
directed government benefits principally to the middle and 
upper classes. 

Juscelino Kubitschek (1956-61), the only post-Vargas elected 
president to serve a full term, soothed opponents by avoiding 
the emotional appeals of the populists. Even so, his common 
touch reached millions, and his developmentalist and national- 
ist visions stirred the Brazilian imagination. Kubitschek co- 
opted the military by involving it in the decision-making pro- 
cess and by adequately funding it. He pushed the creation of 
an automotive industry, which in a generation would result in 
Brazil's leaping from the bull cart and mule train era into that 
of the internal combustion engine. The new factories turned 
out 321,000 vehicles in 1960. The great highway network of the 
late twentieth century and the world's eighth-largest automo- 
bile production are his legacies. And he yanked Brazil away 
from its fascination with the coast by moving the capital to 
Brasilia in a new Federal District (Distrito Federal) carved out 
of then-distant Goias. Thanks to the changes in transportation 
and the growing availability of motorized farm equipment, the 
vast countryside of Goias and Mato Grosso would be cultivated 
in the next decades, and Brazil would become the world's num- 
ber-two food exporter. The overall economy would expand 8.3 



73 



Brazil: A Country Study 

percent a year. There was a lot of truth in his government's 
motto: "Fifty Years' Progress in Five." 

Brazil of 1960 was very different from that of 1930. The pop- 
ulation, which had been 33.5 million in 1930, was now 70 mil- 
lion, with 44 percent in urban areas. A third of all Latin 
Americans were Brazilian. Life expectancy had improved 
noticeably. The number of industrial workers had more than 
doubled from a 1940 level of 1.6 million to 2.9 million, and the 
industrial share of GDP was higher (25.2 percent) than that of 
agriculture (22.5 percent). The underside of such progress was 
a continuous swelling of urban slums and inflation. The annual 
rate of inflation rose from 12 percent in 1949 to 26 percent in 
1959, and then zoomed to a shocking 39.5 percent in 1960. 
Savings depreciated, lenders refused to offer long-term loans, 
interest rates soared, and the government refused to undertake 
orthodox, anti-inflationary programs styled after those of the 
International Monetary Fund (IMF — see Glossary). Moreover, 
the disparities between rich and poor remained, with 40 per- 
cent of national income enjoyed by 10 percent of the popula- 
tion, 36 percent going to the next 30 percent, and 24 percent 
being divided among the poorest 60 percent of Brazilians. 
Before national wealth could be redistributed, however, devel- 
opment had to be maintained. 

Brazil had the potential, but it lacked the hard currency nec- 
essary to pay for the imports needed to sustain swift industrial- 
ization. Either it could cut imports, thereby paralyzing factories 
and transportation, or it could stop repayments on foreign 
loans and profit remittances from foreign investments. With 
such unpalatable alternatives, it is not surprising that Brazilian 
governments had difficulty formulating an economic plan that 
would both satisfy creditors and keep trade flowing. 

The populist administrations of Janio Quadros (January- 
August 1961) andjoao Goulart (1961-64) expanded the term 
povo once again to embrace the rural poor, thereby producing 
the image of a budding proletariat ready to join a reformist 
government against elite privilege and United States imperial- 
ism. Quadros, a former governor of Sao Paulo, could not keep 
his promise to sweep out corruption, because his bid for more 
presidential power ended with his sudden resignation on 
August 25, 1961. He had assembled a makeshift political coali- 
tion that gave him an impressive electoral margin but did not 
give him enough influence in Congress to get his legislation 
passed. 



74 



Brasilia 

Courtesy Brazilian Embassy, Washington 

Frustrated, he planned to restructure the government, but 
before he could act, Carlos Lacerda, governor of Guanabara 
(the old Rio de Janeiro Federal District), revealed that 
Quadros intended to close Congress, decree reforms, and get 
the people's blessing in a plebiscite. Quadros and Lacerda 
clashed over the issue of an independent foreign policy. Such a 
policy, which Quadros supported, emphasized new markets for 
Brazilian products and a strong stance in favor of the develop- 
ing world, while maintaining relations with the United States 
but refusing to isolate Cuba. Lacerda was particularly critical of 
Quadros's pro-Cuba policy. Quadros resigned believing that 
the military would be unwilling to allow Vice President Joao 
Goulart, a populist and former minister of labor under Vargas, 
to assume the presidency. Quadros hoped that his action would 
shock the povo into taking to the streets to demand his reimpo- 
sition and would spur the military into pressuring Congress. 
He then flew to Sao Paulo, where he spent the next day at a 
military base waiting for the summons to return, but instead 
the head of the Chamber of Deputies was sworn in as acting 
president. People were shocked, but they tended to feel 
betrayed by Quadros rather than believe that "terrible forces" 



75 



Brazil: A Country Study 

had risen against him. On that Friday in August 1961, the 
republic of 1945 began its painful death. 

Instead of worrying how to restore Quadros, the politicians 
and military leaders focused on Goulart's succession. An 
uneasy country awaited Goulart on his return from a trade mis- 
sion to China. Congress refused to agree to the request of the 
military ministers that it disavow his right to the presidency. His 
brother-in-law, Leonel de Moura Brizola, the fiery governor of 
Rio Grande do Sul, and the regional army commander 
announced that their forces would defend the constitution. 
The threat of civil war was ominous. Instead, a compromise 
changed the constitutional system from a presidential to a par- 
liamentary one (1961-63), with Goulart as president and Tan- 
credo de Almeida Neves of Minas Gerais as prime minister. In 
the next months, Goulart, chafing at the attempt to turn him 
into a figurehead, made heated appeals to the masses to mobi- 
lize in his favor. Goulart secured victory in a 1962 plebiscite, 
which restored the presidential system in January 1963. Unhap- 
pily, Goulart interpreted the five-to-one margin as a personal 
mandate, as opposed to a mandate for the presidential system. 

Goulart's relations with the United States went from uneasy, 
when he visited President John F. Kennedy and gave a speech 
to the United States Congress in April 1963, to frigid, when 
President Lyndon B. Johnson took over in Washington in 
November 1963. The United States, smarting from Fidel Cas- 
tro's radicalization of Cuba, resented Brazilian unwillingness to 
isolate Havana and became obsessed with peasants organizing 
in the impoverished Northeast. Washington poured millions of 
dollars directly into that region's states, bypassing Goulart's 
government. The regional elites happily accepted United 
States aid to expand their autonomy vis-a-vis Brasilia. 

Goulart carried his populism too far when he backed pro- 
posals for noncommissioned officers to hold political office 
and when he appeared sympathetic to rebelling sergeants in 
September 1963. The officer corps believed that the president 
was undermining discipline, thereby threatening military insti- 
tutions. 

Minister of Army General Amaury Kruel complained that 
the army had been subjected to a "survival" budget since 1958 
and that most of its armaments and equipment were either 
obsolete, beyond repair, or required replacement. In 1962 
every regional army headquarters reported that it was not in 
condition to hold regular exercises, and many officers con- 



76 



Historical Setting 



eluded that their efforts were useless because of a generalized 
"disbelief and lack of incentive." General Kruel alerted Presi- 
dent Goulart that inadequate funding was creating a "calami- 
tous situation" in which the army was being "economically and 
financially asphyxiated." 

The right and the military charged that Goulart's call for 
reforming legislation was merely a cover for a radical national- 
ist takeover. Publicly, they organized study groups, formed a 
shadow government, orchestrated an intense press campaign, 
and staged street marches. Secretly, they armed large landown- 
ers (fazendeiros) in the countryside, developed plans to neutral- 
ize opposition and to topple the government, and sought help 
from the United States. The military was again about to break 
the bonds of obedience to a national government. The argu- 
ment was that the armed forces should support any govern- 
ment as long as it was democratic. 

Such logic grew more persuasive as political mobilization 
gripped the society. Peasant land seizures and urban food riots 
contributed to a sense of impending chaos. Brizola bragged 
foolishly that he had a 200,000-strong peoples' militia orga- 
nized in groups of eleven. The opposition charged the govern- 
ment with arousing a "state of revolutionary war." In the 
months before March 1964, the staff and student officers of the 
Army General Staff School (Escola de Comando de Estado- 
Maior do Exercito — ECEME) played a key role in convincing 
officers that they should support a move against Goulart. Even 
the highly respected chief of staff, Marshal Humberto de Alen- 
car Castelo Branco, joined the conspiracy. Castelo Branco had 
served as FEB operations officer in Italy, director of studies at 
ECEME, and long-time head of the War College. The officers 
believed that rational economic development, internal security, 
and institutional well-being would occur only if economic and 
political structures were altered, and that the civilian leaders 
were unwilling to make the necessary changes. They believed 
that the left was so well-organized that the conspiracy might 
fail. They had plans to flee Brazil in that case, and United 
States officers had promised that they would receive training 
and logistical support to return to wage a guerrilla war. 

Struggling to keep the impatient left on his side and to stave 
off the right, Goulart opted for a series of public rallies to 
mobilize pressure for basic reforms. In a huge rally in Rio de 
Janeiro on March 13, 1964, Goulart decreed agrarian reform 
and rent controls and promised more. A counter rally against 



77 



Brazil: A Country Study 

the government, held six days later in Sao Paulo, put 500,000 
people marching in the streets. Sailors and marines in Rio de 
Janeiro, led by an agent provocateur of the anti-Goulart con- 
spiracy, mutinied in support of Goulart. However, Goulart mis- 
handled the incident by agreeing that they would not be 
punished and that the navy minister would be changed. The 
uproar was immediate. Rio de Janeiro's Correio da Manha pub- 
lished an unusual Easter Sunday edition with the headline 
"Enough!" It was followed the next day, March 30, with one say- 
ing "Out!" In the next two days, the military moved to secure 
the country, and Goulart fled to Uruguay. Brizola's resistance 
groups proved an illusion, as did the supposed arms caches of 
the unions and the readiness of favela residents to attack the 
wealthy. The period of the military republic had begun. 

The Military Republic, 1 964-85 

The military held power from 1964 until March 1985 not by 
design but because of political struggles within the new regime. 
Just as the regime changes of 1889, 1930, and 1945 unleashed 
competing political forces and caused splits in the military, so 
too did the regime change of 1964. Because no civilian politi- 
cian was acceptable to all the revolutionary factions, the army 
chief of staff, Marshal Humberto Castelo Branco (president, 
1964-67), became president with the intention of overseeing a 
reform of the political-economic system. He refused to stay 
beyond the term of deposed Joao Goulart or to institutionalize 
the military in power. However, competing demands radical- 
ized the situation; military hard-liners wanted a complete 
purge of left-wing and populist influences, while civilian politi- 
cians obstructed Castelo Branco's reforms. The latter accused 
him of dictatorial methods, and the former criticized him for 
not going far enough. To satisfy the military hard-liners, he 
recessed and purged Congress, removed objectionable state 
governors, and decreed expansion of the president's (and 
thereby the military's) arbitrary powers at the expense of the 
legislature and judiciary. His gamble succeeded in curbing the 
populist left but provided the successor governments of Mar- 
shal Artur da Costa e Silva (1967-69) and General Emflio Gar- 
rastazu Medici (1969-74) with a basis for authoritarian rule. 
Anti-Goulart politicians understood too late the forces they 
had helped unleash. 

Castelo Branco tried to maintain a degree of democracy. His 
economic reforms prepared the way for the Brazilian eco- 



78 



Ministry of Army, Brasilia 
Courtesy Michael Borg-Hansen 



nomic "miracle" of the next decade, and his restructuring of 
the party system that had existed since 1945 shaped the con- 
tours of government-opposition relations for the next two 
decades. He preserved presidential supremacy over the mili- 
tary and kept potential coup-makers in check, but in the pro- 
cess he had to expand presidential powers in the infamous 
Second Institutional Act of October 1965, and he had to accept 
the succession of Minister of Army Costa e Silva. 

As in earlier regime changes, the armed forces' officer corps 
was divided between those who believed that they should con- 
fine themselves to their professional duties and the hard-liners 
who regarded politicians as scoundrels ready to betray Brazil to 
communism or some other menace. The victory of the hard- 
liners dragged Brazil into what political scientist Juan J. Linz 
called "an authoritarian situation." However, because the hard- 
liners could not ignore the counterweight opinions of their 
colleagues or the resistance of society, they were unable to insti- 
tutionalize their agenda politically. In addition, they did not 
attempt to eliminate the trappings of liberal constitutionalism 
because they feared disapproval of international opinion and 
damage to the alliance with the United States. As the citadel of 
anticommunism, the United States provided the ideology that 



79 



Brazil: A Country Study 

the authoritarians used to justify their hold on power. But 
Washington also preached liberal democracy, which forced the 
authoritarians to assume the contradictory position of defend- 
ing democracy by destroying it. Their concern for appearances 
caused them to abstain from personalist dictatorship by requir- 
ing each successive general-president to pass power to his 
replacement. 

The role of the United States in these events was complex 
and at times contradictory. An anti-Goulart press campaign was 
conducted throughout 1963, and in 1964 the Johnson adminis- 
tration gave moral support to the campaign. Ambassador Lin- 
coln Gordon later admitted that the embassy had given money 
to anti-Goulart candidates in the 1962 municipal elections and 
had encouraged the plotters; that many extra United States 
military and intelligence personnel were operating in Brazil; 
and that four United States Navy oil tankers and the carrier For- 
restal, in an operation code-named Brother Sam, had stood off 
the coast in case of need during the 1964 coup. Washington 
immediately recognized the new government in 1964 and 
joined the chorus chanting that the coup d'etat of the "demo- 
cratic forces" had staved off the hand of international commu- 
nism. In retrospect, it appears that the only foreign hand 
involved was Washington's, although the United States was not 
the principal actor in these events. Indeed, the hard-liners in 
the Brazilian military pressured Costa e Silva into promulgat- 
ing the Fifth Institutional Act on December 13, 1968. This act 
gave the president dictatorial powers, dissolved Congress and 
state legislatures, suspended the constitution, and imposed 
censorship. 

In October 1969, when President Costa e Silva died unex- 
pectedly, the democratic mask fell off as the officer corps of the 
three services consulted among themselves to pick General 
Garrastazu Medici for the presidency. Costa e Silva and Medici 
represented the hard-line, antipolitics segment of the military, 
which seemingly was content to hold authority as long as neces- 
sary to turn Brazil into a great power. The Medici government 
illustrated how it was possible to remain in power without pop- 
ular support, without a political party, and without a well- 
defined program. It was the era of terrorist actions in the cities, 
replete with kidnappings of diplomats, including the United 
States ambassador, and an extensive antiguerrilla campaign in 
northern Goias. The repressive apparatus expanded into vari- 
ous agencies, which spied on political opponents and engaged 



80 



Historical Setting 



in dirty tricks, torture, and "disappearings" (see The Military 
Role in the Intelligence Services, ch. 5). Those operations 
caused an open break between the government and the hierar- 
chy of the Roman Catholic Church for the first time in Brazil- 
ian history. They also produced a deterioration in relations 
with the United States, whose leaders had expected the Castelo 
Branco vision of the revolution to win out. 

The Medici administration wrapped itself in the green and 
gold flag when Brazil won the World Cup in soccer in 1970, 
began to build the Trans-Amazonian Highway through the 
northern rain forests, and dammed the Rio Parana, creating 
the world's largest hydroelectric dam at Itaipu. From 1968 to 
1974, parallel with the darkest days of the dictatorship, the mil- 
itary-civil technocratic alliance took shape as the economy 
boomed, reaching annual GDP growth rates of 12 percent. It 
looked as if Brazil's dreams of full industrialization and great- 
power status were possible. Sadly, in those years of the sup- 
posed "economic miracles," criticism and labor unrest were 
suppressed with arrests, torture, and censorship. Moreover, this 
apparent success of mixing authoritarian rule and economic 
growth encouraged officers in Argentina, Chile, Bolivia, and 
Uruguay to seize power in their countries. 

It was in this atmosphere that retired General Ernesto Geisel 
(1974-79) came to the presidency with Medici's approval. 
There had been intense behind-the-scenes maneuvering by the 
hard-liners against him and by the more moderate supporters 
of Castelo Branco for him. Fortunately for Geisel, his brother, 
Orlando Geisel, was the minister of army, and his close ally, 
General Joao Baptista de Oliveira Figueiredo, was chief of 
Medici's military staff. 

Although not immediately understood by civilians, Ernesto 
Geisel's accession signaled a move away from repression toward 
democratic rule. Geisel replaced several regional commanders 
with trusted officers and labeled his political program distensdo, 
meaning a gradual relaxation of authoritarian rule. It would 
be, in his words, "the maximum of development possible with 
the minimum of indispensable security." 

President Geisel sought to maintain high economic growth 
rates, even while seeking to deal with the effects of the oil 
shocks. He kept up massive investments in infrastructure — 
highways, telecommunications, hydroelectric dams, mineral 
extraction, factories, and atomic energy. Fending off national- 
ist objections, he opened Brazil to oil prospecting by foreign 



81 



Brazil: A Country Study 



firms for the first time since the early 1950s. His government 
borrowed billions of dollars to see Brazil through the oil crisis. 

Brazil shifted its foreign policy to meet its economic needs. 
"Responsible pragmatism" replaced strict alignment with the 
United States and a worldview based on ideological frontiers 
and blocs of nations. Because Brazil was 80 percent dependent 
on imported oil, Geisel shifted the country from a pro-Israeli 
stance to closer ties with oil-rich Saudi Arabia and Iraq. His gov- 
ernment also recognized China, Angola, and Mozambique and 
moved closer to Spanish America, Europe, and Japan. The 
1975 agreement with the Federal Republic of Germany (West 
Germany) to build nuclear reactors produced confrontation 
with the Carter administration., which was also scolding the Gei- 
sel government for the human rights abuses that it was fighting 
to stop. Frustrated with what he saw as United States highhand- 
edness and lack of understanding, Geisel renounced the mili- 
tary alliance with the United States in April 1977. 

In 1977 and 1978, the succession issue caused further con- 
frontations with the hard-liners. Noting that Brazil was only a 
"relative democracy," Geisel attempted in April 1977 to restrain 
the growing strength of the opposition parties by creating an 
electoral college that would approve his selected replacement. 
In October he dismissed the far-right minister of army, General 
Sylvio Cueto Coelho da Frota. In 1978 Geisel maneuvered 
through the first labor strikes since 1964 and through the 
repeated electoral victories of the opposition Brazilian Demo- 
cratic Movement (Movimento Democratico Brasileiro — 
MDB). He allowed the return of exiles, restored habeas corpus, 
repealed the extraordinary powers decreed by the Fifth Institu- 
tional Act, and imposed General Joao Figueiredo (1979-85) as 
his successor in March 1979. 

The last military president, Joao Figueiredo, said that he 
took over the presidency more out of a sense of dun- than polit- 
ical ambition. He signed a general amnesty into law and turned 
Geisel's distensdo into a gradual abertura (the opening of the 
political system), saying that his goal was "to make this country 
a democracy." The hard-liners reacted to the opening with a 
series of terrorist bombings. An April 1981 bombing incident 
confirmed direct military involvement in terrorism, but 
Figueiredo proved too weak to punish the guilty. The incident 
and the regime's inaction strengthened the public's resolve to 
end military rule. Moreover, Fisoieiredo faced other significant 



82 



Historical Setting 



problems, such as soaring inflation, declining productivity, and 
a mounting foreign debt. 

Political liberalization and the declining world economy 
contributed to Brazil's economic and social problems. In 1978 
and 1980, huge strikes took place in the industrial ring around 
Sao Paulo. Protesters asserted that wage increases indexed to 
the inflation rate were far below a livable level. Union leaders, 
including the future 1990 presidential candidate Luis "Lula" 
Inacio da Silva, were arrested for violation of national security 
laws. The IMF imposed a painful austerity program on Brazil. 
Under that program, Brazil was required to hold down wages 
to fight inflation. In the North, Northeast, and even in rela- 
tively prosperous Rio Grande do Sul, rural people seized 
unused, private land, forcing the government to create a new 
land reform ministry. Tension with the Roman Catholic 
Church, the major voice for societal change, peaked in the 
early 1980s with the expulsion of foreign priests involved in 
political and land reform issues. 

To attack the soaring debt, Figueiredo's administration 
stressed exports — food, natural resources, automobiles, arms, 
clothing, shoes, even electricity — and expanded petroleum 
exploration by foreign companies. In foreign relations, the 
objective was to establish ties with any country that would con- 
tribute to Brazilian economic development. Washington was 
kept at a certain distance, and the North-South dialogue was 
emphasized. 

In 1983 the economy leaped ahead with 5.4 percent GDP 
growth, but it was lost in the rising inflation and the failure of 
political leadership. Figueiredo's heart condition led to bypass 
surgery in the United States, removing him from control of the 
situation. In an impressive display, millions of Brazilians took to 
the streets in all the major cities demanding a direct vote (dire- 
tasjdf) in the choice of the next president. In April 1984, Con- 
gress failed to achieve the necessary numbers to give the 
people their wish, and the choice was left to an electoral col- 
lege. Figueiredo did not act forcefully to back a preference, so 
it became a scramble as candidates pursued the collegial votes. 

On January 15, 1985, the electoral college elected Tancredo 
Neves of Minas Gerais, Vargas's minister of justice in the 1950s, 
and former federal deputy, senator, and prime minister. Neves 
was a sensible politician with a reputation for honesty. How- 
ever, he collapsed the night before his inaugural, and the presi- 
dency passed to Vice President Jose Sarney (president, 1985- 



83 



Brazil: A Country Study 

90), long-time supporter of the military regime. Neves died on 
April 21. The hopes that 1985 would be a quick transition to a 
new regime faded as Brazilians watched this turn of events in a 
state of shock. Like the regime changes of 1822, 1889, 1930, 
1946, and 1964, the 1985 change also proved to be long and 
difficult (see Politics, 1985-96, ch. 4). 

* * * 

Charles Wagley's An Introduction to Brazil, although dated, is 
still valuable for an understanding of Brazilian history. Darcy 
Ribeiro provides a stimulating overview in O povo brasileiro. For 
an examination of how race influenced thought and national- 
ism, see Thomas E. Skidmore's Black into White. E. Bradford 
Burns's Nationalism in Brazil: Historical Survey focuses on the 
creation of Brazilian nationalism. There are several general his- 
tories, such as Burns's A History of Brazil, Ronald M. Schneider's 
Order and Progress: A Political History of Brazil, and Leslie 
Bethell's two edited volumes for The Cambridge History of Latin 
America. Modern Brazil: Elites and Masses in Historical Perspective, 
edited by Michael L. Conniff and Frank D. McCann, sets con- 
temporary Brazilian society into its historical context. 

The starting point for the vast literature in English on the 
322-year-long colonial era, is Francis A. Dutra's A Guide to the 
History of Brazil, 1500-1822. Not to be missed are books by 
Charles R. Boxer, Stuart B. Schwartz, Dauril Alden, and Ken- 
neth R. Maxwell. The numerous books covering the period 
1808-22, when the Portuguese crown ruled from Rio de 
Janeiro, into the independent Brazilian imperial era, include 
Roderick J. Barman's Brazil: The Forging of a Nation, 1798-1852; 
Clarence H. Haring's Empire in Brazil; Neill Macauley's Dom 
Pedro: The Struggle for Liberty in Brazil and Portugal; Roderick Cav- 
aliero's The Independence of Brazil; and Emilia Viotti da Costa's 
The Brazilian Empire. A fascinating study of Pedro IPs Brazil is O 
Brasil no tempo deDom Pedro If 1831-1889 by Frederic Mauro. 
Slavery is a key topic of many studies, including Stanley J. 
Stein's Vassouras; Mary C. Karasch's Slave Life in Rio de Janeiro, 
1808-1850; Joaquim Nabuco's Abolitionism: The Brazilian Anti- 
slavery Struggle; and Robert Conrad's The Destruction of Brazilian 
Slavery, 1850-1888. 

An excellent overview of the 1889-64 period is in Jose Maria 
Bello's A History of Modern Brazil, 1889-1964. On the political 
economy of 1889-1930, see Steven C. Topik's The Political Econ- 



84 



Historical Setting 



omy of the Brazilian State, 1889-1930. For daily life, work, and the 
roles of women, see Ina von Binzer's Os mens Romanos, Maria 
Odila Silva Dias's Power and Everyday Life, and Joel Wolfe's Work- 
ing Women, Working Men. 

The military is the subject of Jose Augusto Drummond's fine 
study of Tenentismo: movimento tenentista; Neill Macaulay's The 
Prestes Column; Stanley E. Hilton's 1932 and A rebeliao vermelha; 
Alfred C. Stepan's The Military in Politics, Authoritarian Brazil, 
and Rethinking Military Politics; Frank D. McCann's "The Brazil- 
ian Army and the Problem of Mission, 1939-1964" in Journal of 
Latin; American Studies; and Amado Luiz Cervo and Clodoaldo 
Bueno's Historia da politica exterior do Brasil. Foreign relations 
are the focus of E. Bradford Burns 's The Unwritten Alliance: Rio- 
Branco and Brazilian-American Relations; Joseph Smith's Unequal 
Giants; McCann's The Brazilian- American Alliance, 1937-1945; 
Elizabeth A. Cobbs's The Rich Neighbor Policy; Ruth Leacock's 
Requiem for Revolution; Michael W. Weis's Cold Warriors and Coups 
d'Etat; and Amado Luiz Cervo (ed.), desafio intemacional. 

The literature on politics after 1930 is extensive. Some sug- 
gestions are Thomas E. Skidmore's Politics in Brazil, 1930-1964 
and The Politics of Military Rule in Brazil, 1964-85; Ronald M. 
Schneider's The Political System of Brazil; Maria Helena Moreira 
Alves's State and Opposition in Military Brazil; and Stepan's 
Democratizing Brazil. For religion and the role of the Catholic 
Church, see Scott Mainwaring's The Catholic Church and Politics 
in Brazil, 1916-1985 and Rowan Ireland's Kingdoms Come. (For 
further information and complete citations, see Bibliography.) 



85 



Chapter 2, The Society and Its Environment 



A nineteenth-century wood carving made by an indigenous Brazilian tribe, 
from Hjalmar Stolpe, Amazon Indian Designs from Brazilian and Gui- 
anan Wood Carvings 



THE FIFTH LARGEST country in the world, Brazil is the larg- 
est country in Latin America and has territory slightly larger 
than that of the continental United States. Its population, esti- 
mated officially at nearly 160 million in mid-1997, is the largest 
in Latin America and constitutes about half of the population 
in South America. With 80 percent of its population living in 
cities and towns, Brazil is one of the most urbanized and indus- 
trialized countries in Latin America. Sao Paulo and Rio de 
Janeiro are among the ten largest cities in the world. Sao Paulo, 
with its 18 million people, is the world's third largest city, after 
Mexico City and Tokyo. Yet, parts of Brazil's Amazon region, 
which has some of the world's most extensive wilderness areas, 
are sparsely inhabited by indigenous peoples still in the process 
of coming into contact with the modern world. 

More than for its superlatives, however, Brazil stands out for 
its regional and social disparities. Brazil is noted for having one 
of the most unequal income distributions of any country. In 
the rural Northeast (Nordeste), there is poverty similar to that 
found in some African and Asian countries. Although 
increased urbanization has accompanied economic develop- 
ment, it also has created serious social problems in the cities. 
Even the wealthiest cities contain numerous shantytowns called 
favelas. 

While in many ways this diversity or heterogeneity makes it 
similar to other developing countries in Latin America and 
elsewhere, Brazil is also unique. One of the fascinating ele- 
ments of this uniqueness is that it is different things at once, 
presenting different faces or identities of a single coherent 
whole. Both local and foreign perceptions of Brazil tend to 
exaggerate particular features, lack a balanced view, and fail to 
grasp how the parts of the whole fit together. During the twen- 
tieth century, for example, Brazil came to be known to the rest 
of the world and to many of its own inhabitants in picturesque 
motifs that could best be fit together coherently in terms of a 
"land of contrasts." The country was considered a tropical para- 
dise famed for its exports (coffee), music (such as Carmen 
Miranda, samba, and bossa nova), and soccer (thanks to Edson 
Arantes do Nascimento (Pele)), as well as the nearly mythical 
Amazon rain forest. Rio de Janeiro was associated with Sugar- 
loaf (Pao de Acucar), Copacabana, income tax fugitives, and 



89 



Brazil: A Country Study 

even the mastermind of Britain's "Great Train Robbery" of 
1963. On a more serious level, Brazil often was disparaged for 
its inability to solve basic political and economic problems, 
such as consolidating democratic institutions, controlling run- 
away inflation, and servicing the foreign debt. However, the 
nation is noted for being an emerging industrial power and for 
constructing giant public works, such as the new capital city of 
Brasilia, the Trans-Amazonian Highway, and the world's largest 
hydroelectric dam (Itaipu). Brazil also stands out for its leader- 
ship role in Latin America and the developing world. 

Most Brazilians saw the military regime (1964-85) as a 
repressive dictatorship, although others regarded it as having 
saved the country from communism. Brazilian society was 
viewed as conservative and male chauvinistic, yet simulta- 
neously freewheeling or even licentious, as revealed in its Car- 
naval (Carnival) festivities. In the 1980s, much of the world saw 
the Amazon, the world's greatest store of biodiversity, and its 
native peoples as falling victim to unparalleled destruction. In 
the early 1990s, the news of massacres of Yanomami Indians, 
street children, andfavela dwellers who inhabit Rio de Janeiro's 
hillsides sundered Brazil's image of cordiality. Although there 
were other reasons for pessimism and a continuing identity cri- 
sis (Brazil became the first democracy to impeach its president, 
in December 1992), there were reasons for pride as well (infla- 
tion was brought under control in 1994). Was Brazil a "serious 
country" destined to be a great power, or was it always to 
remain a land of the future? 

One can find ample evidence for countervailing trends: 
unity and diversity, modernity and tradition, progressive gov- 
ernment policies and deeply rooted inequality, tight control by 
elites and broadening popular participation, principles and 
pragmatism. There are no simple answers. This chapter exam- 
ines Brazil's social and environmental complexity and its char- 
acteristic paradoxes and nuances of meaning, beginning with 
the physical setting and moving into the more mercurial social 
issues, with special attention to how society relates to nature. 

The Physical Setting 

Size and Location 

With its expansive territory, Brazil occupies most of the east- 
ern part of the South American continent and its geographic 
heartland, as well as various islands in the Atlantic Ocean. The 



90 



The Society and Its Environment 



only countries in the world that are larger are Russia, Canada, 
China, and the United States (including Alaska). The national 
territory extends 4,395 kilometers from north to south 
(5°16'20" N to 33°44'32 M S latitude) and 4,319 kilometers from 
east to west (34°47'30" E to 73°59'32" W longitude). It spans 
four time zones, the westernmost of which, in Acre State, is the 
same as Eastern Standard Time in the United States. The time 
zone of the capital (Brasilia) and of the most populated part of 
Brazil along the east coast is two hours ahead of Eastern Stan- 
dard Time, except when it is on its own daylight savings time, 
from October to February. The Atlantic islands are in the east- 
ernmost time zone. 

Brazil possesses the archipelago of Fernando de Noronha, 
located 350 kilometers northeast of its "horn," and several 
small islands and atolls in the Atlantic — Abrolhos, Atol das 
Rocas, Penedos de Sao Pedro e Sao Paulo, Trindade, and Mar- 
tini Vaz. In the early 1970s, Brazil claimed a territorial sea 
extending 362 kilometers from the country's shores, including 
those of the islands. 

On Brazil's east coast, the Atlantic coastline extends 7,367 
kilometers. In the west, in clockwise order from the south, Bra- 
zil has 15,719 kilometers of borders with Uruguay, Argentina, 
Paraguay, Bolivia, Peru, Colombia, Venezuela, Guyana, Suri- 
name, and French Guiana (see table 2, Appendix). The only 
South American countries with which Brazil does not share 
borders are Chile and Ecuador. A few short sections are in 
question, but there are no major boundary controversies with 
any of the neighboring countries. 

Geology, Geomorphology, and Drainage 

In contrast to the Andes, which rose to elevations of nearly 
7,000 meters in a relatively recent epoch and inverted the Ama- 
zon's direction of flow from westward to eastward, Brazil's geo- 
logical formation is very old. Precambrian crystalline shields 
cover 36 percent of the territory, especially its central area. The 
principal mountain ranges average elevations just under 2,000 
meters. The Serra do Mar Range hugs the Atlantic coast, and 
the Serra do Espinhaco Range, the largest in area, extends 
through the south-central part of the country (see fig. 3). The 
highest mountains are in the Tumucumaque, Pacaraima, and 
Imeri ranges, among others, which traverse the northern bor- 
der with the Guianas and Venezuela. 



91 



Brazil: A Country Study 




The Society and Its Environment 




93 



Brazil: A Country Study 

In addition to mountain ranges (about 0.5 percent of the 
country is above 1,200 meters), Brazil's Central Highlands 
include avast central plateau (Planalto Central). The plateau's 
uneven terrain has an average elevation of 1,000 meters. The 
rest of the territory is made up primarily of sedimentary basins, 
the largest of which is drained by the Amazon and its tributar- 
ies. Of the total territory, 41 percent averages less than 200 
meters in elevation. The coastal zone is noted for thousands of 
kilometers of tropical beaches interspersed with mangroves, 
lagoons, and dunes, as well as numerous coral reefs. 

Brazil has one of the world's most extensive river systems, 
with eight major drainage basins, all of which drain into the 
Atlantic Ocean. Two of these basins — the Amazon and 
Tocantins-Araguaia — account for more than half the total 
drainage area. The largest river system in Brazil is the Amazon, 
which originates in the Andes and receives tributaries from a 
basin that covers 45.7 percent of the country, principally the 
north and west. The main Amazon river system is the Amazo- 
nas-Solimoes-Ucayali axis (the 6,762 kilometer-long Ucayali is a 
Peruvian tributary), flowing from west to east. Through the 
Amazon Basin flows one-fifth of the world's fresh water. A total 
of 3,615 kilometers of the Amazon are in Brazilian territory. 
Over this distance, the waters decline only about 100 meters. 
The major tributaries on the southern side are, from west to 
east, the Javari, Jurua, Purus (all three of which flow into the 
western section of the Amazon called the Solimoes), Madeira, 
Tapajos, Xingu, and Tocantins. On the northern side, the larg- 
est tributaries are the Branco, Japura, Jari, and Negro. The 
above-mentioned tributaries carry more water than the Missis- 
sippi (its discharge is less than one-tenth that of the Amazon) . 
The Amazon and some of its tributaries, called "white" rivers, 
bear rich sediments and hydrobiological elements. The black- 
white and clear rivers — such as the Negro, Tapajos, and 
Xingu — have clear (greenish) or dark water with few nutrients 
and little sediment. 

The major river system in the Northeast is the Sao Francisco, 
which flows 1,609 kilometers northeast from the south-central 
region. Its basin covers 7.6 percent of the national territory. 
Only 277 kilometers of the lower river are navigable for ocean- 
going ships. The Parana system covers 14.5 percent of the 
country. The Parana flows south into the Rio de la Plata Basin, 
reaching the Atlantic between Argentina and Uruguay. The 
headwaters of the Paraguai, the Parana's major eastern tribu- 



94 



The Society and Its Environment 



tary, constitute the Pantanal, the largest contiguous wetlands in 
the world, covering as much as 230,000 square kilometers. 

Below their descent from the highlands, many of the tribu- 
taries of the Amazon are navigable. Upstream, they generally 
have rapids or waterfalls, and boats and barges also must face 
sandbars, trees, and other obstacles. Nevertheless, the Amazon 
is navigable by oceangoing vessels as far as 3,885 kilometers 
upstream, reaching Iquitos in Peru. The Amazon river system 
was the principal means of access until new roads became more 
important in the 1970s. The Sao Francisco was also used for 
transportation in the past. Dams and locks in the Parana system 
have made it an important artery for interstate and interna- 
tional trade in the 1990s. 

The various river systems descending from the shields have 
endowed Brazil with vast hydroelectric potential, estimated at 
129,046 megawatts (MW), of which 30,065 MW were in opera- 
tion or under construction in 1991. The largest hydroelectric 
projects are Itaipu, in Parana, with 12,600 MW; Tucurui, in 
Para, with 7,746 MW; and Paulo Afonso, in Bahia, with 3,986 
MW. 

Soils and Vegetation 

Brazil's tropical soils produce 70 million tons of grain crops 
per year, but this output is attributed more to their extension 
than their fertility. Despite the earliest Portuguese explorers' 
reports that the land was exceptionally fertile and that any- 
thing planted grew well, the record in terms of sustained agri- 
cultural productivity has been generally disappointing. High 
initial fertility after clearing and burning usually is depleted 
rapidly, and acidity and aluminum content are often high. 
Together with the rapid growth of weeds and pests in cultivated 
areas, as a result of high temperatures and humidity, this loss of 
fertility explains the westward movement of the agricultural 
frontier and slash-and-burn agriculture (see Glossary); it takes 
less investment in work or money to clear new land than to 
continue cultivating the same land. Burning also is used tradi- 
tionally to remove tall, dry, and nutrient-poor grass from pas- 
ture at the end of the dry season. Until mechanization and the 
use of chemical and genetic inputs increased during the agri- 
cultural intensification period of the 1970s and 1980s, coffee 
planting and farming in general moved constantly onward to 
new lands in the west and north. This pattern of horizontal or 
extensive expansion maintained low levels of technology and 



95 



Brazil: A Country Study 



productivity and placed emphasis oh quantity rather than qual- 
ity of agricultural production. 

The largest areas of fertile soils, called terra roxa (red earth), 
are found in the states of Parana and Sao Paulo. The least fer- 
tile areas are in the Amazon, where the dense rain forest is. 
Soils in the Northeast are often fertile, but they lack water, 
unless they are irrigated artificially. 

In the 1980s, investments made possible the use of irriga- 
tion, especially in the Northeast Region and in Rio Grande do 
Sul State, which had shifted from grazing to soy and rice pro- 
duction in the 1970s. Savanna soils also were made usable for 
soybean farming through acidity correction, fertilization, plant 
breeding, and in some cases spray irrigation. As agriculture 
underwent modernization in the 1970s and 1980s, soil fertility 
became less important for agricultural production than factors 
related to capital investment, such as infrastructure, mechani- 
zation, use of chemical inputs, breeding, and proximity to mar- 
kets. Consequently, the vigor of frontier expansion weakened. 

The variety of climates, soils, and drainage conditions in Bra- 
zil is reflected in the range of its vegetation types. The Amazon 
Basin and the areas of heavy rainfall along the Atlantic coast 
have tropical rain forest composed of broadleaf evergreen 
trees. The rain forest may contain as many as 3,000 species of 
flora and fauna within a 2.6-square-kilometer area. The Atlan- 
tic Forest is reputed to have even greater biological diversity 
than the Amazon rain forest, which, despite apparent homoge- 
neity, contains many types of vegetation, from high canopy for- 
est to bamboo groves. 

In the semiarid Northeast, caatinga, a dry, thick, thorny vege- 
tation, predominates. Most of central Brazil is covered with a 
woodland savanna, known as the cerrado (sparse scrub trees and 
drought-resistant grasses), which became an area of agricul- 
tural development after the mid-1970s. In the South (Sul), nee- 
dle-leaved pinewoods (Parana pine or araucaria) cover the 
highlands; grassland similar to the Argentine pampa covers the 
sea-level plains. The Mato Grosso swamplands (Pantanal Mato- 
grossense) is a Florida-sized plain in the western portion of the 
Center- West (Centro-Oeste) . It is covered with tall grasses, 
bushes, and widely dispersed trees similar to those of the cer- 
rado and is partly submerged during the rainy season. 

Brazil, which is named after reddish dyewood (pau brasil), 
has long been famous for the wealth of its tropical forests. 
These are not, however, as important to world markets as those 



96 



The Society and Its Environment 



of Asia and Africa, which started to reach depletion only in the 
1980s. By 1996 more than 90 percent of the original Atlantic 
forest had been cleared, primarily for agriculture, with little 
use made of the wood, except for araucaria pine in Parana. 

The inverse situation existed with regard to clearing for 
wood in the Amazon rain forest, of which about 15 percent had 
been cleared by 1994, and part of the remainder had been dis- 
turbed by selective logging. Because the Amazon forest is 
highly heterogeneous, with hundreds of woody species per 
hectare, there is considerable distance between individual trees 
of economic value, such as mahogany and cerejeira. Therefore, 
this type of forest is not normally cleared for Umber extraction 
but logged through high-grading, or selection of the most valu- 
able trees. Because of vines, felling, and transportation, their 
removal causes destruction of many other trees, and the litter 
and new growth create a risk of forest fires, which are otherwise 
rare in rain forests. In favorable locations, such as Paragomi- 
nas, in the northeastern part of Para State, a new pattern of 
timber extraction has emerged: diversification and the produc- 
tion of plywood have led to the economic use of more than 100 
tree species. 

Starting in the late 1980s, rapid deforestation and extensive 
burning in Brazil received considerable international and 
national attention. Satellite images have helped document and 
quantify deforestation as well as fires, but their use also has 
generated considerable controversy because of problems of 
defining original vegetation, cloud cover, and dealing with sec- 
ondary growth and because fires, as mentioned above, may 
occur in old pasture rather than signifying new clearing. Public 
policies intended to promote sustainable management of tim- 
ber extraction, as well as sustainable use of nontimber forest 
products (such as rubber, Brazil nuts, fruits, seeds, oils, and 
vines), were being discussed intensely in the mid-1990s. How- 
ever, implementing the principles of sustainable development 
(see Glossary), without irreversible damage to the environ- 
ment, proved to be more challenging than establishing inter- 
national agreements about them. 

Climate 

Although 90 percent of the country is within the tropical 
zone, the climate of Brazil varies considerably from the mostly 
tropical North (the equator traverses the mouth of the Ama- 
zon) to temperate zones below the Tropic of Capricorn (23°27' 



97 



Brazil: A Country Study 

S latitude), which crosses the country at the latitude of the city 
of Sao Paulo. Brazil has five climatic regions — equatorial, tropi- 
cal, semiarid, highland tropical, and subtropical. 

Temperatures along the equator are high, averaging above 
25°C, but not reaching the summer extremes of up to 40°C in 
the temperate zones. There is little seasonal variation near the 
equator, although at times it can get cool enough for wearing a 
jacket, especially in the rain. At the country's other extreme, 
there are frosts south of the Tropic of Capricorn during the 
winter (June-August), and in some years there is snow in the 
mountainous areas, such as Rio Grande do Sul and Santa Cata- 
rina. Temperatures in the cities of Sao Paulo, Belo Horizonte, 
and Brasilia are moderate (usually between 15°C and 30°C), 
despite their relatively low latitude, because of their elevation 
of approximately 1,000 meters. Rio de Janeiro, Recife, and Sal- 
vador on the coast have warm climates, with average tempera- 
tures ranging from 23°C to 27°C, but enjoy constant trade 
winds. The southern cities of Porto Alegre and Curitiba have a 
subtropical climate similar to that in parts of the United States 
and Europe, and temperatures can fall below freezing in win- 
ter. 

Precipitation levels vary widely. Most of Brazil has moderate 
rainfall of between 1,000 and 1,500 millimeters a year, with 
most of the rain falling in the summer (between December and 
April) south of the Equator. The Amazon region is notoriously 
humid, with rainfall generally more than 2,000 millimeters per 
year and reaching as high as 3,000 millimeters in parts of the 
western Amazon and near Belem. It is less widely known that, 
despite high annual precipitation, the Amazon rain forest has a 
three- to five-month dry season, the timing of which varies 
according to location north or south of the equator. 

High and relatively regular levels of precipitation in the 
Amazon contrast sharply with the dryness of the semiarid 
Northeast, where rainfall is scarce and there are severe 
droughts in cycles averaging seven years. The Northeast is the 
driest part of the country. The region also constitutes the hot- 
test part of Brazil, where during the dry season between May 
and November, temperatures of more than 38°C have been 
recorded. However, the sertdo, a region of semidesert vegeta- 
tion used primarily for low-density ranching, turns green when 
there is rain. Most of the Center-West has 1,500 to 2,000 milli- 
meters of rain per year, with a pronounced dry season in the 
middle of the year, while the South and most of the Atlantic 



98 



The Society and Its Environment 

coast as far north as Salvador, Bahia, in the Northeast, have sim- 
ilar amounts of rainfall without a distinct dry season. 

Geographic Regions 

Brazil's twenty-six states and the Federal District (Distrito 
Federal) are divided conventionally into five regions — North 
(Norte), Northeast, Southeast (Sudeste), South, and Center- 
West (see fig. 4). In 1996 there were 5,581 municipalities 
(municipios) , which have municipal governments. Many munic- 
ipalities, which are comparable to United States counties, are 
in turn divided into districts (distritos), which do not have polit- 
ical or administrative autonomy. In 1995 there were 9,274 dis- 
tricts. All municipal and district seats, regardless of size, are 
considered officially to be urban. For purely statistical pur- 
poses, the municipalities were grouped in 1990 into 559 micro- 
regions, which in turn constituted 136 meso-regions. This 
grouping modified the previous micro-regional division estab- 
lished in 1968, a division that was used to present census data 
for 1970, 1975, 1980, and 1985. 

Each of the five major regions has a distinct ecosystem. 
Administrative boundaries do not necessarily coincide with 
ecological boundaries, however. In addition to differences in 
physical environment, patterns of economic activity and popu- 
lation settlement vary widely among the regions. The principal 
ecological characteristics of each of the five major regions, as 
well as their principal socioeconomic and demographic fea- 
tures, are summarized below. 

North 

The equatorial North, also known as the Amazon or 
Amazonia, includes, from west to east, the states of Rondonia, 
Acre, Amazonas, Roraima, Para, Amapa, and, as of 1988, 
Tocantins (created from the northern part of Goias State, 
which is situated in the Center-West). Rondonia, previously a 
federal territory, became a state in 1986. The former federal 
territories of Roraima and Amapa were raised to statehood in 
1988. 

With 3,869,638 square kilometers, the North is the country's 
largest region, covering 45.3 percent of the national territory 
(see table 3, Appendix). The region's principal biome is the 
humid tropical forest, also known as the rain forest, home to 
some of the planet's richest biological diversity. The North has 
served as a source of forest products ranging from "backlands 



99 



Brazil: A Country Study 



Boundary representation 
not necessarily authoritative 




Figure 4. Geographic Regions, 1997 

drugs" (such as sarsaparilla, cocoa, cinnamon, and turtle but- 
ter) in the colonial period to rubber and Brazil nuts in more 
recent times. In the mid-twentieth century, nonforest products 
from mining, farming, and livestock-raising became more 
important, and in the 1980s the lumber industry boomed. In 
1990, 6.6 percent of the region's territory was considered 
altered by anthropic (man-made) action, with state levels vary- 
ing from 0.9 percent in Amapa to 14.0 percent in Rondonia. 



100 



The Society and Its Environment 



In 1996 the North had 11.1 million inhabitants, only 7 per- 
cent of the national total. However, its share of Brazil's total 
had grown rapidly in the 1970s and early 1980s as a result of 
interregional migration, as well as high rates of natural 
increase. The largest population concentrations are in eastern 
Para State and in Rondonia. The major cities are Belem and 
Santarem in Para, and Manaus in Amazonas. Living standards 
are below the national average. The highest per capita income, 
US$2,888, in the region in 1994, was in Amazonas, while the 
lowest, US$901, was in Tocantins. 

Northeast 

The nine states that make up the Northeast are Alagoas, 
Bahia, Ceara, Maranhao, Paraiba, Pernambuco, Piauf, Rio 
Grande do Norte, and Sergipe. The former federal territory of 
Fernando de Noronha was incorporated into Pernambuco 
State in 1988. For planning or ecological purposes, Maranhao 
west of 44° W longitude, most of which until recently was cov- 
ered with "pre-Amazon" forest (that is, transition from the 
cerrado or caatinga to tropical forest), is often included in the 
Amazon region. 

The Northeast, with 1,561,178 square kilometers, covers 18.3 
percent of the national territory. Its principal biome is the 
semiarid caatinga region, which is subject to prolonged peri- 
odic droughts. By the 1990s, this region utilized extensive irri- 
gation. In an area known as the forest zone (zona da mata), the 
Atlantic Forest, now almost entirely gone, once stretched along 
the coastline as far north as Rio Grande do Norte. Sugar plan- 
tations established there in colonial times persisted for centu- 
ries. Between the mata and the sertao lies a transition zone 
called the agreste, an area of mixed farming. In 1988-89, 46.3 
percent of the region had been subjected to anthropic activity, 
ranging from a low of 10.8 percent in Maranhao to a high of 
77.2 percent in Alagoas. 

Because its high rates of natural increase offset heavy out- 
migration, the Northeast's large share of the country's total 
population declined only slightly during the twentieth century. 
In 1996 the region had 45 million inhabitants, 28 percent of 
Brazil's total population. The population is densest along the 
coast, where eight of the nine state capitals are located, but is 
also spread throughout the interior. The major cities are Salva- 
dor, in Bahia; Recife, in Pernambuco; and Fortaleza, in Ceara. 
The region has the country's largest concentration of rural 



101 



Brazil: A Country Study 

population, and its living standards are the lowest in Brazil. In 
1994 Piauf had the lowest per capita income in the region and 
the country, only US$835, while Sergipe had the highest aver- 
age income in the region, with US$1,958. 

Southeast 

The Southeast consists of the four states of Espfrito Santo, 
Minas Gerais, Rio de Janeiro, and Sao Paulo. Its total area of 
927,286 square kilometers corresponds to 10.9 percent of the 
national territory. The region has the largest share of the coun- 
try's population, 63 million in 1991, or 39 percent of the 
national total, primarily as a result of internal migration since 
the mid-nineteenth century until the 1980s. In addition to a 
dense urban network, it contains the megacities of Sao Paulo 
and Rio de Janeiro, which in 1991 had 18.7 million and 11.7 
million inhabitants in their metropolitan areas, respectively. 
The region combines the highest living standards in Brazil with 
pockets of urban poverty. In 1994 Sao Paulo boasted an average 
income of US$4,666, while Minas Gerais reported only 
US$2,833. 

Originally, the principal biome in the Southeast was the 
Atlantic Forest, but by 1990 less than 10 percent of the original 
forest cover remained as a result of clearing for farming, ranch- 
ing, and charcoal making. Anthropic activity had altered 79.5 
percent of the region, ranging from 75 percent in Minas Gerais 
to 91.1 percent in Espfrito Santo. The region has most of Bra- 
zil's industrial production. The state of Sao Paulo alone 
accounts for half of the country's industries. Agriculture, also 
very strong, has diversified and now uses modern technology. 

South 

The three states in the temperate South — Parana, Rio 
Grande do Sul, and Santa Catarina — cover 577,214 square kilo- 
meters, or 6.8 percent of the national territory. The population 
of the South in 1991 was 23.1 million, or 14 percent of the 
country's total. The region is almost as densely settled as the 
Southeast, but the population is more concentrated along the 
coast. The major cities are Curitiba and Porto Alegre. The 
inhabitants of the South enjoy relatively high living standards. 
Because of its industry and agriculture, Parana had the highest 
average income in 1994, US$3,674, while Santa Catarina, a 
land of small farmers and small industries, had slightly less, 
US$3,405. 



102 



The Society and Its Environment 



In addition to the Atlantic Forest and pine woods, much of 
which were cleared in the post-World War II period, the South 
contains pampa grasslands, similar to those of Argentina and 
Uruguay, in the extreme south. In 1982, 83.5 percent of the 
region had been altered by anthropic activity, with the highest 
level (89.7 percent) in Rio Grande do Sul, and the lowest (66.7 
percent) in Santa Catarina. Agriculture — much of which, such 
as rice production, is carried out by small farmers — has high 
levels of productivity. There are also some important indus- 
tries. 

Center-West 

The Center-West consists of the states of Goias, Mato Grosso, 
and Mato Grosso do Sul (separated from Mato Grosso in 
1979), as well as the Federal District, site of Brasilia, the 
national capital. Until 1988 Goias State included the area that 
then became the state of Tocantins in the North. 

The Center-West has 1,612,077 square kilometers and covers 
18.9 percent of the national territory. Its main biome is the 
cerrado, the tropical savanna in which natural grassland is partly 
covered with twisted shrubs and small trees. The cerrado was 
used for low-density cattle-raising in the past but is now also 
used for soybean production. There are gallery forests along 
the rivers and streams and some larger areas of forest, most of 
which have been cleared for farming and livestock. In the 
north, the cerrado blends into tropical forest. It also includes 
the Pantanal wetlands in the west, known for their wildlife, 
especially aquatic birds and caymans. In the early 1980s, 33.6 
percent of the region had been altered by anthropic activities, 
with a low of 9.3 percent in Mato Grosso and a high of 72.9 per- 
cent in Goias (not including Tocantins). In 1996 the Center- 
West region had 10.2 million inhabitants, or 6 percent of Bra- 
zil's total population. The average density is low, with concen- 
trations in and around the cities of Brasilia, Goiania, Campo 
Grande, and Cuiaba. Living standards are below the national 
average. In 1994 they were highest in the Federal District, with 
per capita income of US$7,089 (the highest in the nation), and 
lowest in Mato Grosso, with US$2,268. 

The Environment 

The environmental problem that attracted most interna- 
tional attention in Brazil in the 1980s was undoubtedly defores- 
tation in the Amazon. Of all Latin American countries, Brazil 



103 



Brazil: A Country Study 

still has the largest portion (66 percent) of its territory covered 
by forests, but clearing and burning in the Amazon proceeded 
at alarming rates in the 1970s and 1980s. Most of the clearing 
resulted from the activities of ranchers, including large corpo- 
rate operations, and a smaller portion resulted from slash-and- 
burn techniques used by small farmers. 

Deforestation in the Amazon declined from levels averaging 
22,000 square kilometers per year during the 1970-88 period 
to about 11,000 square kilometers per year between 1988 and 
1991. There was controversy about the levels in the mid-1990s. 
Knowledgeable experts placed the level of accumulated defor- 
estation at about 15 percent in 1996, as opposed to 12 percent 
in 1991. Although unseasonal rainfall patterns may explain 
some year-to-year variation, the basic cause for the decline in 
deforestation after 1987 was economic crisis. There was insuffi- 
cient capital, credit, or incentive for large-scale clearing, as well 
as insufficient public investment to stimulate new migration. 
Migration to the Amazon also fell quickly in the late 1980s. 
More effective enforcement of government regulations and 
bad publicity for large offenders, both of which were associated 
with changes in public opinion about the environment, also 
played a part. Technical changes involved in the transition 
from horizontal expansion of agriculture to increasing produc- 
tivity also accounted for decreasing rates of deforestation. 

Desertification, another important environmental problem 
in Brazil, only received international attention following the 
United Nations Conference on the Environment and Develop- 
ment, also known as the Earth Summit, held in Rio de Janeiro 
in June 1992. Desertification means that the soils and vegeta- 
tion of drylands are severely degraded, not necessarily that 
land turns into desert. In the early 1990s, it became evident 
that the semi arid caatinga ecosystem of the Northeast was los- 
ing its natural vegetation through clearing and that the zone 
was therefore running the risk of becoming even more arid, as 
was occurring also in some other regions. 

In areas where agriculture is more intense and developed, 
there are serious problems of soil erosion, siltation and sedi- 
mentation of streams and rivers, and pollution with pesticides. 
In parts of the savannas, where irrigated soybean production 
expanded in the 1980s, the water table has been affected. 
Expansion of pastures for cattle-raising has reduced natural 
biodiversity in the savannas. Swine effluents constitute a serious 
environmental problem in Santa Catarina in the South. 



104 



The Society and Its Environment 



In urban areas, at least in the largest cities, levels of air pollu- 
tion and congestion are typical of, or worse than, those found 
in cities in developed countries. At the same time, however, 
basic environmental problems related to the lack of sanitation, 
which developed countries solved long ago, persist in Brazil. 
These problems are sometimes worse in middle-sized and small 
cities than in large cities, which have more resources to deal 
with them. Environmental problems of cities and towns finally 
began to receive greater attention by society and the govern- 
ment in the 1990s. 

According to many critics, the economic crisis in the 1980s 
worsened environmental degradation in Brazil because it led to 
over exploitation of natural resources, stimulated settlement in 
fragile lands in both rural and urban areas, and weakened envi- 
ronmental protection. At the same time, however, the lower 
level of economic activity may have reduced pressure on the 
environment, such as the aforementioned decreased level of 
investment in large-scale clearing in the Amazon. That pres- 
sure could increase if economic growth accelerates, especially 
if consumption patterns remain unchanged and more sustain- 
able forms of production are not found. 

In Brazil public policies regarding the environment are gen- 
erally advanced, although their implementation and the 
enforcement of environmental laws have been far from ideal. 
Laws regarding forests, water, and wildlife have been in effect 
since the 1930s. Brazil achieved significant institutional 
advances in environmental policy design and implementation 
after the Stockholm Conference on the Environment in 1972. 
Specialized environmental agencies were organized at the fede- 
ral level and in some states, and many national parks and 
reserves were established. By 1992 Brazil had established thirty- 
four national parks and fifty-six biological reserves (see fig. 5). 
In 1981 the National Environment Policy was defined, and the 
National System for the Environment (Sistema Nacional do 
Meio Ambiente — Sisnama) was created, with the National Envi- 
ronmental Council (Conselho Nacional do Meio Ambiente— 
Conama) at its apex, municipal councils at its base, and state- 
level councils in between. In addition to government authori- 
ties, all of these councils include representatives of civil society. 

The 1988 constitution incorporates environmental precepts 
that are advanced compared with those of most other coun- 
tries. At that time, the Chamber of Deputies (Camara dos Dep- 
utados) established its permanent Commission for Defense of 



105 



Brazil: A Country Study 



Boundary representation 
not necessarily authoritative 




Ecological Regions 

Amazonia (tropical rain forest) 
Cerrado (savanna)* 
Mares de Morros 

(tropical semideciduous forest) 
Caatinga (semiarid grassland) 
Faixas de Transicao 
(transitional palm forest) 
Araucaria (Parana pine forest) 
Pradarias (grassland) 
* Savanna grass, low trees, and shrubs. 



- State boundary 
National capital 
Populated place 
National park 
Percentage of regional 
deforestation or shrinkage 

200 400 Kilometers 



400 Miles 



National Parks 



Amazonia (1) 
Aparados da Serra (2) 
Araguaia (3) 
Brasilia (4) 
Cabo Orange (5) 
Caparao (6) 

Chapada Diamantina (7) 
Chapada dos Guimaraes (8) 
Chapada dos Veadeiros (9) 
Emas (10) 

Grande Sertao: Veredas (11) 
Iguacu (12) 
Itatiaia (13) 
Jail (14) 

Lagoa do Peixe (15) 

Lencois Maranhenses (16) 

Marfnho de Fernando de Noronha (17) 



Marinho dos Abrolhos (18) 
Monte Pascoal (19) 
Monte Roraima (20) 
Pacaas Novos (21) 
Pantanal Matogrossense (22) 
Pico da Neblina (23) 
Sao Joaquim (24) 
Serra da Bocaina (25) 
Serra da Canastra (26) 
Serra da Capivara (27) 
Serra do Cipo (28) 
Serra do Divisor (29) 
Serra dos Orgaos (30) 
Sete Cidades (31) 
Superagui (32) 
Tijuca (33) 
Ubajara (34) 



Source: Based on information from Almanaque Abril 92, Sao Paulo, 1992, 337. 

Figure 5. Ecological Regions and National Parks, 1992 
106 



The Society and Its Environment 



the Consumer, the Environment, and Minorities. In 1989 the 
creation of the Brazilian Institute for the Environment and 
Renewable Natural Resources (Instituto Brasileiro do Meio 
Ambiente e dos Recursos Naturais Renovaveis — Ibama) joined 
together the federal environment secretariat and the federal 
agencies specializing in forestry, rubber, and fisheries. In 1990 
the administration of Fernando Collor de Mello (president, 
1990-92) appointed the well-known environmentalist Jose 
Lutzemberger as secretary of the environment and took firm 
positions on the environment and on Indian lands. In 1992 
Brazil played a key role at the Earth Summit, not only as its host 
but also as negotiator on sustainable development agreements, 
including the conventions on climate and biodiversity. The 
Ministry of Environment was created in late 1992, after Presi- 
dent Collor had left office. In August 1993, it became the Min- 
istry of Environment and the Legal Amazon and took a more 
pragmatic approach than had the combative Lutzemberger. 
However, because of turnover in its leadership, a poorly 
defined mandate, and lack of funds, its role and impact were 
limited. In 1995 its mandate and name were expanded to 
include water resources — the Ministry of Environment, 
Hydraulic Resources, and the Legal Amazon — it began a pro- 
cess of restructuring to meet its mandate of "shared manage- 
ment of the sustainable use of natural resources." In 1997 the 
Commission on Policies for Sustainable Development and 
Agenda 21 began to function under the aegis of the Civil 
Household. One of its main tasks was to prepare Agenda 21 (a 
plan for the twenty-first century) for Brazil and to stimulate 
preparation of state and local agendas. 

Institutional development at the official level was accompa- 
nied and in part stimulated by the growth, wide diffusion, and 
growing professional development of nongovernmental orga- 
nizations (NGOs) dedicated to environmental and socio-envi- 
ronmental causes. The hundreds of NGOs throughout Brazil 
produce documents containing both useful information and 
passionate criticisms. Among the Brazilian environmental 
NGOs, the most visible are SOS Atlantic Forest (SOS Mata 
Atlantica), the Social-Environmental Institute (Instituto Socio- 
Ambiental — ISA) , the Pro-Nature Foundation (Fundacao Pro- 
Natureza — Funatura), and the Amazon Working Group 
(Grupo de Trabalho Amazonico — GTA). The Brazilian Forum 
of NGOs and Social Movements for the Environment and 
Development and the Brazilian Association of Nongovernmen- 



107 



Brazil: A Country Study 

tal Organizations (Associacao Brasileira de Organizacoes Nao 
Governamentais — ABONG) are national networks, and there 
are various regional and thematic networks as well. The main 
international environmental NGOs that have offices or affili- 
ates in Brazil are the World Wildlife Fund (WWF), Conserva- 
tion International (CI), and Nature Conservancy. 

Especially after the events of the late 1980s, international 
organizations and developed countries have allocated signifi- 
cant resources for the environmental sector in Brazil. In 1992 
environmental projects worth about US$6.8 million were iden- 
tified, with US$2.6 in counterpart funds (funds provided by the 
Brazilian government) . More than 70 percent of the total value 
was for sanitation, urban pollution control, and other urban 
environmental projects. Thus, the allocation of resources did 
not accord with the common belief that funding was influ- 
enced unduly by alarmist views on deforestation in the Ama- 
zon. 

Among the specific environmental projects with interna- 
tional support, the most important was the National Environ- 
mental Plan (Piano Nacional do Meio Ambiente — PNMA), 
which received a US$117 million loan from the World Bank 
(see Glossary). The National Environmental Fund (Fundo 
Nacional do Meio Ambiente — FNMA), in addition to budget- 
ary funds, received US$20 million from the Inter-American 
Development Bank (see Glossary) to finance the environmen- 
tal activities of NGOs and small municipal governments. The 
Pilot Program for the Conservation of the Brazilian Rain For- 
ests (Programa Piloto para a Protecao das Florestas Tropicais 
do Brasil — PPG-7) was supported by the world's seven richest 
countries (the so-called G— 7) and the European Community 
(see Glossary), which allocated US$258 million for projects in 
the Amazon and Atlantic Forest regions. The Global Environ- 
ment Facility (GEF), created in 1990, set aside US$30 million 
for Brazil, part of which is managed by a national fund called 
Funbio. GEF also established a small grants program for NGOs, 
which focused on the cerrado during its pilot phase. The World 
Bank also made loans for environmental and natural resource 
management in Rondonia and Mato Grosso, in part to correct 
environmental and social problems that had been created by 
the World Bank-funded development of the northwest corridor 
in the 1980s. 

Despite favorable laws, promising institutional arrange- 
ments, and external funding, the government has not, on the 



108 



The Society and Its Environment 



whole, been effective in controlling damage to the environ- 
ment. This failure is only in small measure because of the 
opposition of anti-environmental groups. In greater part, it can 
be attributed to the traditional separation between official rhet- 
oric and actual practice in Brazil. It is also related to general 
problems of governance, fiscal crisis, and lingering doubts 
about appropriate tradeoffs between the environment and 
development. Some of the most effective governmental action 
in the environmental area has occurred at the state and local 
levels in the most developed states and has involved NGOs. In 
1994 the PNMA began to stress decentralization and strength- 
ening of state environmental agencies, a tendency that subse- 
quently gained momentum. 

Population 

Population Size and Distribution 

At the turn of the century, Brazil's population was 
17,438,434. By 1950 it had grown to 51,944,397, and in 1970 it 
reached 93,139,037. By 1991 Brazil was the world's sixth most 
populous country, with about 2.7 percent of the world's 5.3 bil- 
lion people or 147,053,940 inhabitants. In July 1996, the popu- 
lation was counted as being 157,079,573, but estimated in 1997 
to be nearly 160 million. Projections indicate a total population 
of 169 million in 2000 and 211 million in 2020, and population 
stability at about 250 million in 2050. The population growth 
rate for the 1992 to 2000 period is estimated at 1.5 percent per 
year. As a result of the decline in mortality and continued high 
fertility during the 1950s and 1960s, the average growth rate 
was nearly 3 percent per year. Subsequent to a decrease in total 
fertility, the growth rate dropped to 2.5 percent in the 1970s 
and 1.9 percent in the 1980s. 

Average population density in Brazil in 1994 was 18.5 inhab- 
itants per square kilometer. There was a wide variation between 
the densely populated Southeast and South, on the one hand, 
and the sparse North and Center-West, on the other, with the 
Northeast at intermediate levels. In comparison, in 1991 the 
United States (including Alaska) had an average of twenty-five 
inhabitants per square kilometer; France, 100; the United 
Kingdom, 100; China, 110; and Canada, three. 

According to the 1996 count, the most populous region in 
the country is still the Southeast (63 million inhabitants), fol- 
lowed by the Northeast (45 million), the South (23.1 million), 



109 



Brazil: A Country Study 

the North (11.1 million), and the Center-West (10.2 million). 
The most inhabited states are Sao Paulo, Minas Gerais, Rio de 
Janeiro, Bahia, Rio Grande do Sul, and Parana. These states all 
lie along the Atlantic coast. 

In some rural areas and many cities, particularly in major 
metropolitan areas, females outnumber males. The historical 
predominance of women over men in the Brazilian population 
has persisted. The 1996 count showed that there were ninety- 
seven men for every 100 women and that the total number of 
women exceeded the number of men by 5 million. 

The average age of the Brazilian population has increased as 
a result of a continued decrease in mortality and fertility. 
Between 1980 and 1990, the proportional share of children 
from birth to age fourteen decreased from 38.2 to 34.7 per- 
cent, while the share for those of age fifteen to sixty-four 
increased from 57.8 to 61.1 percent. The proportion of elderly 
(age sixty-five or greater) increased from 4.0 to 4.2 percent and 
is projected to reach 9.0 percent by the year 2020. In all regions 
of the country, the count registered an increased number of 
people of ages fifteen to sixty-four and of older people over 
sixty-four years old. In the Southeast, for example, the propor- 
tion of people in the former age bracket increased from the 
61.7 percent registered in 1980 to 63.6 percent in 1991, while 
the number of older people increased from 4.2 percent to 5.1 
percent. 

The demographic transition in Brazil becomes apparent as 
the bottom of the very wide-based pyramid, typical of develop- 
ing countries with high birthrates, begins to narrow (see fig. 6). 
Further declines in the fertility rate, estimated at 2.44 children 
born per woman in 1994, eventually will lead to a pyramid that 
is shaped more like a bullet, with cohorts under age sixty of 
roughly equal size. Senior citizens will live longer, and the pro- 
portion of young people will decline. In the year 2000, young 
people will account for 28.3 percent of the population and 
senior citizens, 8 percent. Couples will have fewer children, 
and the fertility rate may be less than 2.2 children per woman, 
the replacement level. 

Mortality 

As is typical in demographic transitions, declines in mortality 
preceded declines in fertility in Brazil, but the process took 
only a few decades rather than centuries, as it did in developed 
countries. The death rate started to fall in the 1940s because of 



110 



The Society and Its Environment 



the expanding public health system, urbanization, and sanita- 
tion. The crude death rate in 1995 was eight per 1,000 popula- 
tion, a notable decrease from the 1960-65 rate of 12.3. The 
1995 level, which is similar to that of developed countries, 
resulted from the age structure being still relatively younger. 

Life expectancy at birth, which is a measure of mortality that 
is not affected by different age structures, began to rise in Bra- 
zil in the 1940s. It increased from 42.7 years in 1940 to 52.7 
years in 1970 and 67.1 years in 1995. It is projected to reach 
68.5 years in 2000 and 75.5 years in 2020. Life expectancy for 
women is about seven years greater than that for men, but the 
differential is decreasing. 

A decline in mortality has occurred in all regions, but strong 
regional variations in life expectancy persist. The lowest levels 
are found in the Northeast (65.4 years in 1995) and the highest 
in the South (69.4 years in 1995), slightly higher than the 
Southeast. The North and Center-West regions have levels of 
life expectancy close to the national average. Within the socio- 
economic strata, higher life expectancy is strongly associated 
with higher family income. Mortality is generally higher in 
rural than in urban areas, except for the lowest income groups. 

In the past, the principal causes of death in Brazil were infec- 
tious and contagious diseases, especially diarrhea and intestinal 
parasites among infants, as well as tuberculosis, measles, and 
respiratory diseases (for a discussion of infant mortality, see 
Indicators of Health, this ch.). As these were brought under 
control in the postwar period, primarily in the more developed 
regions, degenerative diseases such as cardiovascular disorders 
and cancer became proportionately more prevalent. Deaths 
from external causes, including violence and traffic accidents, 
also gained importance. 

Fertility 

In 1996 the crude birthrate was estimated at 21.16 births per 
1,000 population, a significant reduction from 42.1 for the 
1960-65 period. As in the case of mortality, crude birthrates 
are affected by the age structure and, therefore, difficult to 
compare among countries and regions or over time. It is pref- 
erable to use the total fertility rate, a standardized measure that 
corresponds to the average number of children per woman at 
age forty-nine, the end of her reproductive life, assuming that 
she has survived and followed the fertility patterns characteris- 
tic of each age category. 



Ill 



Brazil: A Country Study 



AGE-GROUP Total Population in 1991 = 147,053,900* 

80 and over 
75-79 
70-74 
65-69 
60-64 
55-59 
50-54 
45-49 
40-44 
35-39 
30-34 
25-29 
20-24 
15-19 
10-14 

5-9 

0-4 

15 10 5 5 10 15 

PERCENT OF POPULATION 

*Preliminary count. Final count was 146,825,475. 



Source: Based on information from Fundacao Institute Brasileiro de Geografia e 
Estatistica, Anudrio estatistico do Brasill993, Rio de Janeiro, 1993, 2-25. 

Figure 6. Population Distribution by Age-Group and Sex, 1991 

Brazil's total fertility rate dropped from close to six in the 
1940s and 1950s to 3.3 in 1986 to 2.44 in 1994, not much 
higher than the replacement level of 2.2. Fertility declined in 
urban and rural areas, in all regions, and among all socioeco- 
nomic strata, although the rates continued to vary. In large 
countries, such a rapid and generalized fertility decline had 
been observed previously only in China, where official policy 
placed intense pressure on couples to have only one child. Pro- 
jections indicate a total fertility rate of 2.0 in the year 2000 and 
1.8 in 2020, lower than replacement. 

The Brazilian birthrate began to decline noticeably in the 
1970s, by which time socioeconomic changes had made large 
families less affordable than in the traditional social and eco- 




112 



The Society and Its Environment 

nomic structure in rural areas. In the past, especially in rural 
areas, children started work early and supported their parents 
in old age, and the children did not cost much to raise. In the 
1990s, they attend school for longer periods and cost more to 
support. 

Meanwhile, new methods of birth control, primarily pills 
and female sterilization, became widely available in the 1970s. 
Oral contraceptives are sold over the counter without prescrip- 
tion. Surgical sterilization, which is practiced in Brazil more 
than any other country, is typically performed during cesarean 
deliveries. Such deliveries comprised nearly a third of all deliv- 
eries in the 1980s. Surgical sterilization is of questionable legal- 
ity, but is often carried out by doctors who are paid for the 
cesarean section by the public health system and receive pri- 
vate payment for extra services on the side. 

The number of Brazilian couples opting for sterilization as a 
means of contraception increased by more than 40 percent 
during the 1986-96 period, based on the Demographic and 
Health Survey carried out by Bemfam, an NGO. The survey, 
conducted between March and July 1996, interviewed 12,612 
women between fifteen and forty-nine years of age as well as 
2,949 men between fifteen and fifty-nine years. The survey 
found that 40.1 percent of married women or women living 
with partners had been sterilized, as compared with 26.9 per- 
cent in 1986. In 1986 only 0.8 percent of males had had a vasec- 
tomy, as compared with 2.6 percent in 1996. The Bemfam 
survey showed that the average age at which women are steril- 
ized was 28.9 years in 1996, as compared with 31.4 years in 
1986. 

In the early 1990s, the use of birth-control pills and female 
sterilization (tubal ligation) continued to contribute to the fer- 
tility decline in Brazil. About 65 percent of Brazilian women 
used contraceptives, which is comparable with levels in devel- 
oped countries. Of the women who used some method and 
were in union, 44 percent were sterilized. About 7 percent used 
rhythm, while other contraceptives or methods were rarer. 

Abortion in Brazil is significant. In the early 1990s, some 1.4 
million abortions were performed each year, almost all of 
which were technically illegal. This corresponds to approxi- 
mately one abortion for every two live births. The only cases in 
which abortion is not subject to legal sanctions in Brazil are 
rape and danger to the mother's life, but the law is not 
enforced effectively. The practice of unsafe, clandestine abor- 



113 



Brazil: A Country Study 

tions helps to explain why Brazil has the fifth highest maternal 
mortality rate in Latin America, estimated at 141 deaths per 
1,000 births, in contrast to eight in the United States. 

A fertility decline in Brazil occurred in the absence of any 
official policy in favor of controlling birthrates. The govern- 
ment's stance was one of laissez-faire. Although it did not pro- 
mote family planning, largely because of the influence of the 
Roman Catholic Church, the government did little to interfere 
with the widespread practice of contraception among the pop- 
ulation at large. Nor did the population pay much heed to reli- 
gious dogma. In the case of fertility regulation, social change in 
Brazil occurred from the bottom up. Women took much of the 
initiative. 

In the 1980s, the Ministry of Health included family plan- 
ning services as part of an integrated women's health program. 
However, because of a severe lack of funds, the direct effects of 
the program were limited. Changing public opinion and the 
women's movement in Brazil favored changes in official policy, 
which were slow to come about. The 1988 constitution 
included the right to plan freely the number of children. A 
Family Planning Law took effect in 1997 in order to regulate 
sterilization, making it available in the public health network 
but forbidding it during deliveries, as well as provide birth-con- 
trol alternatives through the same network. 

Migration and Urbanization 

Immigration from Europe and the African slave trade, which 
were the prime sources of population growth during much of 
Brazil's history, became demographically insignificant by the 
1930s. Subsequently, there were massive transfers of internal 
migrants from the Northeast and Minas Gerais to the growing 
urban centers of Sao Paulo and Rio de Janeiro. Over time, 
there were successive waves of significant but less voluminous 
counterflows to frontier areas in Parana, the Center-West, and 
finally the Amazon. The government's colonization plans, 
which included settlement along the Trans-Amazonian High- 
way, stimulated internal migration. However, the last cycle of 
frontier expansion came to a close, at least temporarily, in the 
late 1980s. 

During the 1950s, 1960s, and 1970s, some 20 million people 
moved from rural to urban areas in Brazil. This population 
movement constitutes one of the largest of its kind in history. 
Brazil's urban population (by the official definition) grew at 



114 



The Society and Its Environment 



rates of about 5 percent per year and accounted for 56 percent 
of the total population in 1970, 68 percent in 1980, and 75 per- 
cent in 1991. During most of the post-World War II period, the 
largest cities grew fastest as a result of gradual migration to pro- 
gressively larger cities. In the 1980s, however, the proportion of 
Brazil's population living in metropolitan areas dropped from 
29 percent to 28 percent. The new pattern of population redis- 
tribution revealed by the 1991 census involved less interre- 
gional migration, with more people staying in their regions of 
origin or moving to large cities nearby rather than to megaci- 
ties. 

Numerous efforts have been made at the policy level to stim- 
ulate settlement in the interior, including colonization in the 
Amazon, and to limit the growth of the largest cities while 
strengthening middle-sized cities. Despite these efforts, how- 
ever, most public policies have continued to favor population 
concentration in the Southeast and in large cities by promoting 
industry at the cost of agriculture and by providing services 
and benefits primarily to urban residents. 

During the 1980s, as a result of economic crisis and 
improved transportation services, emigration from Brazil 
increased to other countries, including the United States, Can- 
ada, Portugal, and Japan. For the first time ever, Brazil became 
a net exporter of population and thus entered a new stage in its 
demographic history. Some of the emigrants sought employ- 
ment in menial jobs in developed countries; others were skilled 
personnel, including scientists and engineers. However, a note- 
worthy reverse brain drain also took place, with skilled workers 
from other Latin American countries and Europe constituting 
a significant proportion of new immigrants. Immigration 
increased from neighboring countries, especially members of 
the Common Market of the South (Mercado Comum do Sul — 
Mercosul; see Glossary), including Argentina, Uruguay, and 
Paraguay, as well as from some countries in Africa and Asia. 

Social Structure 

Social Classes 

Brazil inherited a highly stratified society from the colonial 
system and from slavery, which persisted for nearly three gener- 
ations after independence in 1822. The legacy of sharp socio- 
economic stratification is reflected in Brazil's highly skewed 
income distribution, among the world's worst (see Inequality 



115 



Brazil: A Country Study 

and Poverty, ch. 3). The relatively high average per capita 
income (US$4,086 in 1995) masks deep inequality. During the 
postwar period, income concentration and regional disequilib- 
rium did not change significantly despite numerous govern- 
ment policies aimed at greater equity. Poverty was widespread, 
reaching the lowest levels in the rural parts of the Northeast, 
but also including pockets of urban poverty in the largest cities 
in the developed regions. In 1990 the number of indigents suf- 
fering from extreme poverty (see Glossary) was estimated to be 
at least 32 million, about one-fifth of the country's total popula- 
tion. This included an estimated 9.6 percent of the residents of 
metropolitan areas, 18.4 percent of the population of other 
urban areas, and 42.8 percent of the rural population. 

Socioeconomic inequality involves subtle forms of residen- 
tial, educational, and workplace discrimination, in such ways 
that members of distinct socioeconomic strata tend to live, 
work, and circulate in different settings. The well-to-do live in 
chic neighborhoods, usually centrally located, go to private 
schools, drive or ride in cars, and shop at malls. The urban 
poor live in favelas or distant housing projects, take long bus 
trips to work, go to public schools or drop out, and shop at 
smaller supermarkets or local shops. The rural poor in the 
country's interior are practically invisible to the urban upper 
and middle classes. 

Despite such social segregation, class solidarity is not strong. 
Instead of horizontal class ties, numerous cross-cutting vertical 
relationships involve personal dependence on individuals who 
have more property and prestige. Given the circumstances, 
these relationships of clientelism and paternalism are advanta- 
geous for both patrons and clients. Because of the lack of effec- 
tive government services and real possibilities for class action, 
the poor have few alternatives but to seek the protection of 
patrons. The traditional rural forms of patronage have been 
described as colonelism {coronelismo — see Glossary), referring 
to the fact that rural bosses often had military titles (see The 
Old or First Republic, 1889-1930, ch. 1). Among other things, 
colonels (coroneis) used their influence over their clientele for 
electoral purposes. Such vertical interpersonal ties continue to 
be stronger in rural areas, especially in the Northeast, but they 
also persist in other forms in urban settings and at various lev- 
els of the socioeconomic scale. Even members of the modern 
middle class tend to have lower-income persons or families 
dependent on them for such things as domestic employment 



116 



The Society and Its Environment 



and economic or health emergencies. They, in turn, seek help 
from powerful friends and relatives. 

Contrary to dualistic stereotypes of Latin American societies, 
Brazilian class structure cannot be reduced to a wealthy landed 
elite versus masses of poor peasants and workers. The middle 
sectors or classes have been significant at least since the nine- 
teenth century. Sectors of Brazil's population that were neither 
slave owners nor slaves began to grow in the colonial period, 
when craftsmen, shopkeepers, small farmers, freed slaves, and 
persons of mixed racial origin began to outnumber slave own- 
ers and eventually slaves. During the twentieth century, the 
middle sectors continued to grow. The present middle class 
does not own large properties, industries, or firms but also is 
not destitute. It consists largely of a technical work force — 
clerks, professionals, teachers, salespersons, public servants, 
and highly skilled workers. Its position is based more on knowl- 
edge and skills than on property. A surge of upward mobility 
strengthened the middle class during the "economic miracle" 
in the late 1960s and early 1970s. At the same time, blue-collar 
workers with middle to low levels of skills constitute a lower 
middle class that is numerically very significant. 

In addition to those formally employed, many workers are in 
the so-called informal economy (see Glossary), which includes 
self-employed businessmen and workers who do not have the 
legal protection of labor legislation. In 1990 the informal sec- 
tor accounted for nearly half of the economically active popula- 
tion. The informal sector grows in times of recession because 
of unemployment and during times of prosperity, when oppor- 
tunities for making money are more readily available. A survey 
released in 1996 by the Brazilian Institute of Geography and 
Statistics (Fundacao Instituto Brasileiro de Geografia e Estatis- 
tica — IBGE) showed that only 85 percent of those questioned 
wanted to seek formal employment. 

Increasingly, the system of social stratification that was origi- 
nally based on property (land or industry) has evolved in such 
a way that individuals who acquire special technical skills or 
know-how are able to earn reasonable incomes. Outside these 
two groups of propertied or skilled individuals lies a significant 
mass, perhaps a majority, that is excluded in the sense of lim- 
ited participation in markets and poor access to government 
services, such as health, education, and sanitation. 



117 



Brazil: A Country Study 
Gender 

For reasons of property transmission and religion, Brazilian 
society was originally strongly patriarchal, but there was also 
strong tension between rigid norms of Iberian origin and the 
extenuating circumstances of frontier life, where conditions 
were not favorable for compliance with the norms. The diffi- 
culty of putting Roman Catholic values into effective practice 
in the context of poverty, isolation, and unbalanced male/ 
female sex ratios (number of men per 100 women) reinforced 
the Mediterranean double moral standard for men and 
women. Men were expected to demonstrate their masculinity, 
while proper women were supposed to remain virgins until 
marriage and to be faithful to their husbands. This double 
standard also favored frequent consensual unions, illegitimacy, 
and prostitution. Such behavior was not entirely acceptable but 
was tolerated more readily in Brazil, generally speaking, than 
in North America and the rest of Latin America. 

Although women were allowed open access to schools and 
employment around the turn of the century and suffrage on a 
national level in 1933, they were not on an equal footing with 
men in family affairs. Men were automatically heads of house- 
holds, and married women were legally subordinate to their 
husbands. Because of the inconvenience caused by informal 
remarriage, divorce was made legal in 1977. Under the consti- 
tution of 1988, women became entirely equal to men for all 
legal purposes. 

Female participation in the labor force grew dramatically in 
the 1970s and 1980s, as a result of new employment patterns, 
especially the expansion of the services sector, and economic 
pressures on family income. Women are most commonly 
employed as domestic servants. The economic participation of 
women in Brazil rose from 18 percent in 1970 to 27 percent by 
1980 and 30 percent by 1990 (although such figures might 
underestimate actual rates of participation by failing to include 
the informal activities that characterize small and/ or house- 
hold enterprises). More than 70 percent of women in the labor 
force are employed by the services sector (as compared with 42 
percent of men), and women tend to be underrepresented 
among the formal labor force in agricultural and industrial 
activities. Patterns of labor force participation vary consider- 
ably by region. In the early 1990s, rates of female labor force 
participation ranged from 36.8 percent in Rio de Janeiro to 
33.1 percent in the Northeast. In Brazil, as in most other coun- 



118 



A family on a nine-hectare farm at Hervalzinho near Almirante 

Tamandare, Parana State 
Courtesy Inter-American Development Bank, Washington 

tries in Latin America, rates of females participating in the job 
market appear to increase with education, especially the pro- 
portion of single educated women entering the formal sector 
rather than the informal and self-employed sectors. 

There is a considerable wage gap between men and women. 
According to one recent estimate, the differential between 
women and men is less pronounced in urban areas (for exam- 
ple, women earn on average 77.8 percent of men's wages in Rio 
de Janeiro and 73.6 percent in Sao Paulo), and most pro- 
nounced in the Northeast (where, on average, women earn 
63.5 percent of the wages of men). Average wages are also con- 
siderably lower in the Northeast, where women's average 
hourly wages are 42 percent of the prevailing average in Rio de 
Janeiro. According to recent economic studies, only a small 



119 



Brazil: A Country Study 



portion (between 11 percent and 19 percent of wage differen- 
tials in the formal labor force) can be attributed to differences 
between men and women in their endowments (such as educa- 
tion or experience). For the most part, the wage gap probably 
reflects discriminatory practices. 

Recent decades have also been characterized by significant 
changes in family structures. For example, the available data 
suggest a considerable increase over the past decades in 
female-headed households, which include the poorest of the 
poor, from 13 percent in 1970 to 16 percent in 1980 and 20 
percent by the late 1980s. This process has been termed the 
"feminization of poverty." Once again, there are considerable 
differences among regions; in the urban North Region, for 
example, over 24 percent of households were headed by 
women in the late 1980s, while their relative share in the South 
was closer to 16 percent. 

Despite persistent gender inequality, the status of women in 
Brazil is improving on various fronts. As a rule, there are as 
many females as males in schools, even at the highest levels, 
and professions that traditionally were dominated by males, 
such as law, medicine, dentistry, and engineering, are becom- 
ing more balanced in terms of gender, if there are not already 
more women students than men. More women than men are in 
the National Lawyers' Association (Associacao Nacional dos 
Advogados). The attitudes and practices of young people are 
generally not as sexist as those of their parents, at least among 
youth of families with higher income and education. 

Nevertheless, there are still relatively few women in positions 
of power. They have a significant, albeit limited, presence in 
high levels of federal government, although they have better 
representation at the state and municipal levels. Since the gov- 
ernment of Joao Baptista do Oliveira Figueiredo (president, 
1979-85), several female ministers have been in the cabinet, 
and in 1994 two women were candidates for vice president. By 
1994 women made up only 7 percent of the Congress (see 
Women in Politics, ch. 4). 

Women's movements grew in the 1980s, when a National 
Council on Women's Rights (Conselho Nacional de Direitos da 
Mulher — CNDM) was created. Originally, the feminist move- 
ment was closely connected to human rights movements and 
resistance to the military regime. In the 1980s and 1990s, atten- 
tion shifted to violence against women, especially domestic vio- 
lence and sexual abuse and harassment. One original response 



120 



The Society and Its Environment 



to this kind of problem was the creation of special police sta- 
tions for women. Women's movements also mobilized support 
for reproductive health and rights, as defined in the 1994 Inter- 
national Conference on Population and Development, held in 
Cairo. 

Youth 

The population under age eighteen was only 30.7 percent of 
the total population in 1991. This significant decrease relative 
to previous decades — it was over 42.6 percent in 1960 — was 
almost entirely the result of rapid fertility decline. Compared 
with developed countries, as mentioned above, Brazil still has a 
relatively young population. 

Overall, school enrollment in the early 1990s reached about 
90 percent of school-age children (seven to fourteen), 
although there was wide variation, with lower coverage among 
rural and low-income populations. There were also high levels 
of repetition, and only a minority of those who entered first 
grade completed the eight grades of fundamental schooling. 
One reason for the high dropout rate was child labor. In 1990, 
18 percent of the children between the ages of ten and four- 
teen participated in economic activity. 

Because of marital instability, unwanted pregnancies, and 
above all poverty, there are thousands of apparently homeless 
"street children" (meninos de rua) in Brazil. The numbers 
require cautious use because, in addition to about 10,000 chil- 
dren who actually live in the streets, this category also includes 
many children who work or otherwise generate income to help 
their families. Truly homeless street children constitute a small 
minority. They attracted considerable public and media atten- 
tion nationally and internationally in the early 1990s because 
of their high visibility and frequent petty thievery, as well as 
cases of violent retaliation, including murder, by the police and 
local businesspeople. 

At least officially, minors have long been protected by the 
Brazilian legal system. Judges in juvenile cases (juizes demenores) 
protect their interests, and a network of institutions, in theory, 
cares for their welfare. In 1990, in response to the problems of 
youth, the Collor government passed special legislation to 
establish children's rights, known as the Children's Statute, and 
created the Brazilian Center of Infancy and Adolescence (Cen- 
tro Brasileiro de Infancia e Adolescencia — CBIA) to carry out 
special programs for children in these age-groups. The govern- 



121 



Brazil: A Country Study 

ment also promoted the establishment of federal, state, and 
municipal councils of childhood and adolescence, which 
included participants from government agencies and civil soci- 
ety. The National Street Children's Movement is an NGO. The 
United Nations Children's Fund (UNICEF) developed the Pact 
for Childhood, and the National Conference of Brazilian Bish- 
ops (Conferencia Nacional dos Bispos do Brasil — CNBB) sup- 
ported the Children's Pastoral Service. 

The Elderly 

The proportion of elderly in the population increases as fer- 
tility declines and longevity increases. The absolute numbers 
grow faster than the total population. The proportion of the 
Brazilian population age sixty-five and older grew from 6.4 per- 
cent in 1960 to 7.6 percent in 1980 and 8 percent in 1991, or 
about 11.7 million. By 2020 the number is expected to increase 
to 15 percent of the population, or about 33 million. Brazil 
faces particular problems with the aged because of difficulties 
in employing them (younger and better trained workers are 
preferred over middle-aged workers) and a lack of appropriate 
means to care for them. As people live longer, the number of 
siblings and children drops, and population mobility increases. 
Consequently, older people are less likely to have children or 
other relatives living nearby who are willing and able to care for 
them. In 1996 the country was shocked by the number of 
deaths of elderly living in very poor conditions in publicly sup- 
ported homes for senior citizens, especially the case of the 
Santa Genoveva Clinic in Rio de Janeiro. 

The government-run social security system provides minimal 
pensions for retired people, including those in rural areas who 
did not contribute to the system as employees. However, health 
care becomes expensive in old age, especially for the so-called 
degenerative diseases, and the cost of private health insurance 
becomes prohibitive. Retired persons were successful in orga- 
nizing pressure groups to protect the real value, after inflation, 
of their pensions in the early 1990s by keeping them pegged to 
the minimum wage. Nonetheless, these pensions were still far 
from being sufficient to care for the needs of most elderly per- 
sons. 

Race and Ethnicity 

The first European immigrants to Brazil were of Iberian ori- 
gin, primarily Portuguese. Some Portuguese settlers were of 



122 



Two women using a public 
telephone in Salvador, Bahia 
State 

Courtesy Inter-American 
Development Bank, 
Washington 



Jewish or Moorish origin but most of them had converted to 
Christianity. There were also some Dutch immigrants to the 
Northeast in the sixteenth and seventeenth centuries. The Por- 
tuguese intermarried with the Amerindian population, which 
was decimated by conflict and disease. 

During the colonial period, after Indian slavery proved diffi- 
cult to enforce, the colonists imported hundreds of thousands 
of slaves from Africa for labor on the sugar plantations, in the 
mines, and later on coffee plantations. At first, slaves outnum- 
bered the white settlers in many areas, but the balance eventu- 
ally changed because of their high mortality and low fertility. 
However, as slavery became economically and politically less 
feasible after 1850 and the British blocked the slave trade, Ital- 
ian immigrants began replacing the slaves on coffee planta- 
tions in Sao Paulo. During the same period, settlers from 
Europe, primarily Germany, Italy, and Poland, established 
farming colonies in parts of the South. 

Brazil's racial mix was made more diverse with the arrival of 
Japanese and Middle Eastern immigrants in the early twentieth 
century. At first, the Japanese worked in agriculture in Sao 
Paulo and the Amazon, while the Lebanese, Turks, and Syrians 
became involved in commerce in many parts of the country. 
During the 1900s, the Japanese descendants, who constitute 



123 



Brazil: A Country Study 



the largest community of Japanese outside of Japan, except for 
Hawaii, became primarily urban residents, especially in Sao 
Paulo. In the 1970s, intermarriage with nonjapanese became 
common. 

As emphasized by anthropologists such as Gilberto Freyre 
and Darcy Ribeiro, all the racial and ethnic groups that arrived 
in Brazil intermingled and intermarried, with few exceptions. 
This led to increasing mixtures of all possible combinations 
and degrees. Many individuals are, therefore, difficult to clas- 
sify in racial terms. Questions on color were included in the 
demographic censuses of 1940, 1950, 1980, and 1991. 
Although the answers involved self-classification and may not 
have been objective, it was clear that the proportion of blacks 
decreased while that of mulattoes increased. There was a simul- 
taneous process of "whitening." The self-declared proportions 
in 1991 were 55.3 percent white, 39.3 percent mulatto, 4.9 per- 
cent black, and 0.6 percent Asian. 

Because of the lack of a clear color distinction and a strong 
cultural tradition of tolerance and cordiality, as well as long- 
standing explicit laws against racial discrimination, Brazil has 
been touted as a "racial democracy." However, "racial democ- 
racy" is a myth. There is a very strong correlation between light 
color and higher income, education, and social status. Few 
blacks reach positions of wealth, prestige, and power, except in 
the arts and sports. Although discrimination is usually not 
explicit, it appears in subtle forms: unwritten rules, unspoken 
attitudes, references to "good appearance" rather than color, 
or simply placing higher value on individuals who are white or 
nearly white. 

In the 1960s, black consciousness began to grow, although 
the very lack of a clear color line in biological or social terms 
weakened racial solidarity of the nonwhite population. The 
prevailing notion that Brazil was a "racial democracy" also 
made it easy to dismiss black movements as un-Brazilian. For 
the most part, the movements did not press for changes in gov- 
ernment policy, which was already officially against racial dis- 
crimination. Instead, they emphasized racial pride and the 
struggle against subtle forms of discrimination and the often 
covert violence to which blacks were subject. 

Amerindians 

Estimates of the original Amerindian population of Brazil 
range from 2 to 5 million at the time of first contact with Euro- 



124 



The Society and Its Environment 



peans in the early sixteenth century. There were hundreds of 
tribes and languages. Now there are 230 tribes that speak more 
than ninety languages and 300 dialects. 

Because of violence and disease, the original Amerindian 
population was reduced to about 150,000 by the early twentieth 
century. In 1910 the Indian Protection Service (Servico de Pro- 
tecao aos Indios — SPI) was established. Its leader, Marechal 
Candido Rondon, was famous for stating that "one should die, 
if necessary, but never kill an Indian." In 1968 the National 
Indian Foundation (Fundacao Nacional do Indio — Funai) 
replaced SPI, which was charged with corruption. The Indian 
Statute went into effect in 1973. The 1988 constitution pro- 
vides that Indians are entitled to the lands that they tradition- 
ally occupy. 

Despite the difficulties it faced, the Amerindian population 
began to recover its numbers and increased to 330,000 by the 
mid-1990s. In genetic terms, millions of Brazilians have some 
Amerindian ancestry, usually on the side of their grandmothers 
or great-grandmothers. The ancestry is especially strong in the 
Amazon region, where the inhabitants of mixed Indian and 
white descent are called caboclos. Because of such widespread 
miscegenation and acculturation, objective definitions of 
"Indian" are practically impossible in Brazil. The most useful 
definition, also used for official purposes, is subjective but 
pragmatic: Indians are those who consider themselves Indians 
and are considered by others as such. They include groups that 
are officially classified as isolated, in the process of integration, 
or integrated (although "integration" involves entry into the 
lowest ranks of Brazilian society) . 

Most of the Amerindian population is in the Amazon region, 
where Amerindian lands account for about 15 percent of the 
territory. Some of the largest areas were set aside during the 
Collor administration in 1992. The best known and largest of 
these is the 9.6-million-hectare Yanomami Indigenous Park, 
located in the northern states of Amazonas and Roraima, along 
Brazil's border with Venezuela. Gold miners and their diseases 
have had an adverse impact on the Yanomami. The Caiapo in 
southeastern Para became widely known both for their tradi- 
tional environmental management and their controversial con- 
cessions to gold miners and lumber companies. Other 
indigenous areas include the Xingu Indigenous Park and other 
parts of Amazonia, including the western section of the Ama- 
zon along the Rio Solimoes, Roraima, northern Amazonas, 



125 



Brazil: A Country Study 

Rondonia, Acre, Amapa, and northern and southeastern Para. 
The Northeast (Maranhao) and Center-West (western Mato 
Grosso, Mato Grosso do Sul, and Goias) regions also have 
large indigenous areas. 

Rural Groups 

Some groups in rural Brazil merit special attention. 
Although there has been massive rural to urban migration in 
Brazil, nearly 40 million people still live in the countryside, and 
another 10 million live in towns with a population under 
20,000. There are also signs of urban to rural migration as a 
result of exhaustion of employment and income opportunities 
in large cities. 

Many of the inhabitants of the countryside are rural workers 
in agriculture, with permanent or, more typically, seasonal 
employment, particularly in harvesting, an activity in which 
women and children are also involved. Although a large num- 
ber of small family farmers have land of their own, millions of 
rural workers are landless because land tenure is extremely 
concentrated in Brazil. In the face of slowness of official land 
reform, they began to invade unproductive properties in the 
1990s. As a result of their organization and massacres of their 
activists in Rondonia and Para, they entered the political lime- 
light, and land reform was placed high on the political agenda. 

In addition to farmers, Brazil has various kinds of traditional 
populations — including rubber tappers, Brazil nut collectors, 
caboclos and other traditional riverine dwellers, small fisher- 
men, and others — who became a new social category in the late 
1980s. Some of them received land from the government in 
the form of extractive reserves, meaning land containing valu- 
able natural resources such as rubber-yielding trees, hard- 
woods, and so forth, ceded to their associations on the 
condition that they use their natural resources in a sustainable 
way. For some rural Brazilians, sustainable extraction presents 
an alternative to rural exodus and structural unemployment. 

Cultural Unity and Diversity 

Brazilian culture was never monolithic. Since the sixteenth 
century, it has been an amalgamation of traditional Iberian, 
indigenous, and African values, as well as more recent Western 
values, developed in northern Europe and the United States, 
such as equality, democracy, efficiency, and individual rights. At 



126 



A farmer buys food and supplies at a farm supply and food store, 

Agudos do Sul, Parana State. 
Courtesy Inter-American Development Bank, Washington 

times there are subtle or open conflicts, especially between 
norms of Mediterranean and Anglo-Saxon origin, or between 
practices of European versus Amerindian or African origin. 
However, Brazil is remarkable for the way in which there is 
unity in cultural diversity. Sometimes the values and practices 
of different origins have blended with each other, as in the case 
of Afro-Brazilian religious syncretism or liberation theology 
(see Glossary). 

Another way of reconciling diversity has been the often con- 
siderable distance between actual practices, which conform 
with tradition, and official norms, which generally follow the 
positivist (positivism — see Glossary) logic of "order and 
progress" that underlay the establishment of the republic in 
1889. The difference between norms and behavior, or between 
theory and practice, is a constant throughout Brazilian history. 
In colonial times and during the empire, imported cultural val- 
ues and social norms had to be reconciled with the extenuating 
circumstances and realities of a frontier situation. Getting mar- 
ried officially, for example, was difficult in the absence of 
priests or because of the high cost of service by the justices of 
the peace. 



127 



Brazil: A Country Study 

In the 1990s, many people ignore laws that are not enforced, 
or allege that doing the right thing would be fine but that they 
lack the condicoes (conditions). The aphorism that sums up a 
common attitude about doing one's duty is, "Ninguem e de ferro" 
(No one is made of iron). The relaxed attitude is reinforced by 
the fact that laws or norms are often seen as having been 
imposed from the outside, rather than being the result of a 
social contract established for the common good. Thus, Brazil- 
ians, who are known for pragmatism, have become adept at liv- 
ing with idealistic rules, on the one hand, and actual practices 
that are often quite divergent, on the other. They switch easily 
between different cultural codes ranging from "traditional" val- 
ues, such as machismo and paternalism, to "modern" values 
and social norms that favor women and equality. 

The Brazilian Way 

Despite regional and social class variations, the Brazilian way 
of life has common traits that distinguish it from the customary 
ways of dealing with people and situations in North America 
and Europe and even in other Latin American countries. Its 
uniqueness seems to result from the peculiar blend of Portu- 
guese, African, and Amerindian cultural influences in a setting 
in which central authority attempted, without great success, to 
exploit the people and resources and to enforce religious 
norms. Under these circumstances, it was preferable to appear 
to obey than actually to obey. 

Many attempts have been made to explain what makes Bra- 
zilians different from their neighbors in the Americas, both 
North and South. In the late nineteenth century, Joaquim 
Maria Machado de Assis, one of Brazil's greatest writers, 
explored the subtleties of the Brazilian character, focusing on 
the attempts of the urban middle class to emulate European 
lifestyles and aspirations. In the 1920s, the writer Mario de 
Andrade, a leader of the modernist movement that broke with 
tradition and attempted to find an authentic Brazilian identity, 
created the archetypal Brazilian character, Macunaima, a lazy 
but ingenious black-turned-white Amazonian who migrated to 
Sao Paulo and was a "man with no character." In the following 
decade, in books such as The Masters and the Slaves (Casa 
Grande e Senzala) and The Mansions and the Shanties (Sobrados 
e Mocambos), Gilberto Freyre emphasized the flexibility of the 
Portuguese, as well as the African roots of the Northeasterners. 
Other authors characterized the Brazilian as homem cordial (cor- 



128 



The Society and Its Environment 



dial man). In his novels and stories, Joao Guimaraes Rosa, Bra- 
zil's greatest writer of the twentieth century, found universal 
themes in the contradictory characters and peculiar language 
of men and women deep in the sertdo backlands. Novelist Jorge 
Amado focused on social conflict, local color, and sensuality in 
his native Bahia State. More recently, the Brazilian anthropolo- 
gist Roberto da Matta explored tensions between the private 
and public spheres, spontaneity, and authority, as well as senti- 
ment and order to which Brazilians have found their own char- 
acteristic solutions. 

At the level of interpersonal relations, in contrast to what is 
usually found in Spanish-speaking Latin America, where behav- 
ior tends to be more formal and rigid, there are in Brazil 
strong cultural values in favor of conciliation, tolerance, and 
cordiality. To the extent possible, direct personal confrontation 
is avoided. This Brazilian style of behavior may be derived from 
an Iberian and colonial heritage of diverse ethnic groups living 
together, weaker central authority exercised by the Portuguese 
crown, and day-to-day practical forms of resistance to exploita- 
tion. It may also have an element of popular emulation of the 
genteel behavior of the elites. Whatever its origins, Brazilians 
are known for their informality, good nature, and charm (sim- 
patia), as well as their desire not to be thought unpleasant or 
boorish (chato). They place high value on warmth, spontaneity, 
and lack of pomp and ceremony. 

Though they are cordial and magnanimous at the interper- 
sonal level, Brazilians as a whole are exploitative with regard to 
the environment. This attitude has been explained in terms of 
the bandeirante or conquistador mentality by authors such as 
Viana Moog and Jorge Wilheim. According to this interpreta- 
tion, the general spirit of the colonizer of yesteryear or today is 
to accumulate as much wealth as possible as quickly as possible 
and then move on. Whatever its roots, the result of this kind of 
behavior is individualism, transience, and disregard for others 
and for nature as opposed to stability, solidarity, equilibrium, 
and equity. It has led to both human and environmental degra- 
dation. 

In a similar fashion, Brazilians tend not to think in terms of 
the common good. Discourse invoking mutual benefit for all 
concerned is often mistrusted as a disguised justification for 
colonialism or exploitation. The result of widespread evasion 
of rules imposed by the central authority is a vicious circle 
involving crackdowns and inspections (fiscalizacdo) to enforce 



129 



Brazil: A Country Study 

ever-tougher rules and ever more sophisticated and ingenious 
ways of evading the rules (burla). This tendency often blocks 
the efforts of those who are well-intentioned, without creating 
major obstacles but rather making their work easier for the 
truly dishonest. 

This nonconformity with illegitimate authority is probablv 
an origin of one of Brazil's most characteristic and original 
concepts, summarized in the word jeito. The word is practically 
untranslatable but refers to ways of "cutting red tape," "bend- 
ing the rules," "looking the other way," or an alternative "way 
out." In its worst form, it amounts to corruption. At its best, it 
means finding pragmatic solutions to difficult problems with- 
out making waves. 

Many Brazilians regard soccer and Carnaval, for which Brazil 
is famous, as outlets for the frustrations of everyday life. Brazil's 
three world soccer championships led to great national pride 
until 1970; subsequent losses caused twenty-four years of frus- 
tration until the fourth World Cup was brought home in 1994. 
The yearly Carnaval festivities provide for short-lived release 
and relaxation. 

Another form of release is through imported and native 
music, widely disseminated by modern communications. The 
bossa nova of the 1960s was replaced by the lively Brazilian 
rhythms and dance movement of form, lambada, and pagode. 

Language 

Language is one of the strongest elements of Brazil's 
national unity. Portuguese is spoken by nearly 100 percent of 
the population. The only exceptions are some members of 
Amerindian groups and pockets of immigrants, primarily from 
Japan and South Korea, who have not yet learned Portuguese. 
The principal families of Indian languages are Tupi, Arawak, 
Carib, and Ge. 

There is about as much difference between the Portuguese 
spoken in Brazil and that spoken in Portugal as between the 
English spoken in the United States and that spoken in the 
United Kingdom. Within Brazil, there are no dialects of Portu- 
guese, but only moderate regional variation in accent, vocabu- 
lary, and use of personal nouns, pronouns, and verb 
conjugations. Variations tend to diminish as a result of mass 
media, especially national television networks that are viewed 
by the majority of Brazilians. 



130 



The Society and Its Environment 



The written language, which is uniform all over Brazil, fol- 
lows national rules of spelling and accentuation that are 
revised from time to time for simplification. They are slightly 
different from the rules followed in Portugal. Written Brazilian 
Portuguese differs significantly from the spoken language and 
is used correctly by only a small, educated minority of the pop- 
ulation. The rules of grammar are complex and allow more 
flexibility than English or Spanish. Many foreigners who speak 
Portuguese fluently have difficulty writing it properly. 

Because of Brazil's size, self-sufficiency, and relative isolation, 
foreign languages are not widely spoken. English is often stud- 
ied in school and increasingly in private courses. It has 
replaced French as the principal second language among edu- 
cated people. Because Spanish is similar to Portuguese, most 
Brazilians can understand it and many can communicate in it, 
although Spanish speakers usually have difficulty understand- 
ing spoken Portuguese. 

Mass Communications 

Under the military governments in the 1970s, Brazil's state- 
owned system of telecommunications became highly devel- 
oped. The telephone system was modernized by means of mas- 
sive government investments. Long-distance and international 
calls, which had been difficult to make and hear until then, 
were made accessible through direct dialing, at least to those 
who could afford the high price of telephone lines. The Postal 
and Telegraph Company (Empresa de Correios e Telegrafos — 
ECT) also became a model of efficiency. Some of the quality of 
telephone and postal services was lost in the 1980s and early 
1990s. 

The development of telecommunications in Brazil was origi- 
nally part of a strategy of modernization with centralized con- 
trol. However, the widespread flow of information contributed 
to democratization of society in the 1980s and 1990s, a process 
in which the uncensored press played a key role. Censorship 
imposed during the military regime was lifted during the 
Figueiredo administration. The press is owned by private enter- 
prises, none of which can be owned or controlled by foreign- 
ers; it includes dozens of daily newspapers, several weekly 
magazines, and a myriad of other periodical publications. 

Radio and television stations are licensed to private busi- 
nesses owned by Brazilians. There are hundreds of radio sta- 
tions all over the country. Television became widespread in the 



131 



Brazil: A Country Study 

1970s, with several national networks and numerous local sta- 
tions in all states. Television sets are common even in low- 
income households. Soap operas (telenovelas) are widely 
watched and are a common topic of conversation. It is a sign of 
their high technical quality that these programs have been sold 
to countries all over the world. The news programs often 
include editorial comment. In the authoritarian period, this 
expression of opinion, sometimes in subtle ways, tended to sup- 
port government. In the 1990s, it has contributed to clearer 
notions of good government and citizens' rights among strata 
that had not developed political consciousness, but it may also 
have contributed to disillusionment. 

Family and Kinship 

The Portuguese crown and ecclesiastical authorities in Brazil 
were not entirely successful in implanting their ideals with 
regard to marriage and the patriarchal family. Brazilians have 
limited enthusiasm for official norms and often resort to con- 
sensual unions, marital dissolution, serial unions, and what the 
Roman Catholic Church generally considers to be lax stan- 
dards of behavior. 

At the same time that many of them bend the rules, Brazil- 
ians place high value on family and kinship relations. These are 
especially valued in an environment in which authorities, on 
the one hand, and one's subordinates, on the other, are 
thought to be untrustworthy. Most Brazilians are genuinely 
fond of children and are attached to their parents, and they 
cultivate a wide circle of aunts, uncles, and cousins. In the past, 
relationships with godchildren, godparents, and ritual co-par- 
ents extended these networks, but they are losing their impor- 
tance in modern urban society. 

Marital separation and divorce as well as formal and infor- 
mal remarriage are now commonplace. Women commonly 
head their own households, and families often include chil- 
dren from different marriages or unions. The new arrange- 
ments are socially accepted but have not become culturally 
institutionalized in the sense of devising new terminology for 
the various relationships. 

Religion 

Roman Catholicism 

Brazil's strong Roman Catholic heritage can be traced to the 



132 



The Society and Its Environment 



Iberian missionary zeal, with the fifteenth-century goal of 
spreading Christianity to the infidels. In the New World, these 
included both Amerindians and African slaves. In addition to 
conversion, there were also strong efforts to enforce compli- 
ance with Roman Catholicism, including the Inquisition, which 
was not established formally in Brazil but nonetheless func- 
tioned widely in the colonies. In the late nineteenth century, 
the original Roman Catholic populace of Iberian origin was 
reinforced by a large number of Italian Catholics who immi- 
grated to Brazil, as well as some Polish and German Catholic 
immigrants. 

According to all the constitutions of the republican period, 
there is no state or official religion. In practice, however, sepa- 
ration of church and state is weak. Government officials gener- 
ally avoid taking action that may offend the church. 

Brazil is said to be the largest Roman Catholic country in the 
world. In 1996 about 76 percent of the population, or about 
122 million people, declared Roman Catholicism as their reli- 
gion, as compared with 89 percent in 1980. The decline may 
have resulted from a combination of a real loss of influence 
and a tendency to be more objective in answering census ques- 
tions about religion. 

As in most dominant religions, there is some distance 
between nominal and practicing Catholics. Brazilians usually 
are baptized and married in the Roman Catholic Church. How- 
ever, according to the CNBB (National Conference of Brazilian 
Bishops), only 20 percent of nominal Catholics attend Mass 
and participate in church activities, but the figure may be as 
low as 10 percent. Women attend Mass more often than men, 
and the elderly are more active in church than the young. In 
the 1990s, charismatic forms of Catholicism used unconven- 
tional approaches, along the line of those used by Pentecostal 
Protestant groups, to attempt revitalization and increase active 
participation. 

Popular or traditional forms of Catholicism are widespread 
in the interior of the country. Many Brazilians pray to figures 
such as Padre Cicero (a revered priest who lived in Ceara from 
1844 to 1934), make pilgrimages to the site of the appearance 
of Brazil's patron saint, our Lady of the Appearance (Nossa 
Senhora Aparecida), and participate in traditional popular 
rites and festivities, such as the Cirio in Belem and the Festa do 
Divino in central Brazil. Some use expressions of religious ori- 
gin, such as asking for a blessing on meeting someone older or 



133 



Brazil: A Country Study 

responding "God willing" (Se Deusquiser) when someone says 
"See you tomorrow." 

During the 1970s, the progressive wing of the church made 
an "option for the poor." They were influenced by the doctrine 
of liberation theology (see Glossary), in which Brazilian theolo- 
gians such as Leonardo Boff played a leading role, and fol- 
lowed the decision of the Latin American Bishops' Conference 
in Medellin, Colombia, in 1968. The church organized Ecclesi- 
astical Base Communities (Comunidades Eclesiais de Base — 
CEBs; see Glossary) throughout the country to work for social 
and political causes at the local level. During the military 
regime, the progressive clergy managed to make the church 
practically the only legitimate focus of resistance and defense 
of human rights. In the early 1990s, conservative forces, sup- 
ported by Pope John Paul II, gained power in the church. 

Other Religions 

Syncretism, the combination of different forms of belief or 
practice, has been widespread in Brazil, where Roman Catholi- 
cism has blended with numerous Afro-Brazilian cults. Syncre- 
tism occurred partly because of religious persecution and 
partly because of the compatibility of the different belief sys- 
tems. The most well-known and socially acceptable combina- 
tions are called umbanda or candomble. At one extreme, 
umbanda blends in with Kardecian spiritualism (see Glossary). 
At the other extreme, there is a kind of black magic called 
macumba, which can be used for either good or evil purposes. 
Its practitioners leave offerings of chicken, rum (cachafd), flow- 
ers, and candles at crossroads, beaches, and other public 
places. Kardecian spiritists, as well as Mormons, Jehovah's Wit- 
nesses, Jews, and Buddhists, together account for about 3 to 5 
percent of the population, while those declaring that they have 
no religion total 15 percent. 

In recent decades, Protestantism has grown rapidly. The pro- 
portion of the population considered evangelical grew from 
3.7 percent in 1960 to 6.6 percent in 1980. The 1991 census 
showed a proportion of 19.2 percent, or 28.2 million followers. 
Nearly half of Brazil's evangelicals, or 13 million, belong to the 
Assembly of God. This and other evangelical or Pentecostal 
varieties of Protestantism — Christian Congregation, Universal 
Church of the Kingdom of God, Quadrangular Evangelicals, 
Brazil for Christ, and God and Love — emphasize brotherhood 
and religious ceremonies that actively engage participants in 



134 



The forty-meter-high statue of 
Christ the Redeemer ( Cristo 
Redendor) on Corcovado, Rio 
de Janeiro 
Courtesy Jaklen Muoi Tuyen 



The Catedral Metropolitana 
( Cathedral of Brasilia), Oscar 
Niemeyer's modern rendition of 
the crown of thorns worn by 
Christ at his crucifixion 
Courtesy Michael Borg-Hansen 



Brazil: A Country Study 

song and chants. The groups that have grown the most are fun- 
damentalists with strict standards of personal behavior regard- 
ing dress, drinking, smoking, and gambling. They have special 
appeal among recent migrants to urban areas or to the fron- 
tier, who have had to adapt to new and difficult circumstances. 
In contrast to the formality and central control of the Roman 
Catholic Church, the fundamentalist Protestant groups grow 
rapidly and split and multiply frequently. 

Health Status and Health Care 

Indicators of Health 

In 1996 the United Nations Development Programme 
(UNDP), which worked together with the Applied Economic 
Research Institute (Instituto de Pesquisa Economica Apli- 
cada — IPEA), released its Human Development Report 1995 for 
Brazil. Using an index based on income, education, infant 
mortality, and other socioeconomic indicators, the report 
showed that Brazil was in a medium human development posi- 
tion as compared with other countries. It suggested that the 
national territory could be divided into three parts, with stan- 
dards of living similar to those found in Belgium (the South 
and Southeast), Bulgaria (Center-West and North), and India 
(Northeast). 

As in the Human Development Report 1995, infant mortality 
rates (deaths of children less than one year of age per 1,000 live 
births) often are used as indicators of living conditions. Since 
the denominator is births, they are not affected by the popula- 
tion's age structure. Because of underreporting of vital statis- 
tics, they must be estimated from census data. The overall 
average infant mortality rate for Brazil declined from 117 per 
1,000 live births to eighty-eight, according to the 1960 and 
1980 censuses, respectively. The 1991 census showed that the 
rate dropped to 49.7 in 1991. In 1995 the estimated rate was 
44.4 per 1,000 live births. 

As usual, national averages mask wide regional and socioeco- 
nomic variations. As in previous decades, infant mortality levels 
in 1995 were lowest in the South, at 21.1, and highest in the 
Northeast, where they reached 70.2, more than three times 
higher. In recent decades, infant mortality generally has been 
higher in rural areas, except for the poorest urban strata, 
whose mortality has been higher. State infant mortality rates 



136 



The Society and Its Environment 



fluctuate from year to year, depending on economic and public 
health conditions. 

The sharp drop in infant mortality in recent decades did not 
necessarily reflect a commensurate general improvement in liv- 
ing conditions. To a large extent, the drop was the result of 
both the decline in fertility, which decreases the risk of infant 
deaths for biological and socioeconomic reasons, and specific 
health and sanitation interventions, primarily use of oral rehy- 
dration and extension of piped water. 

Infectious and Chronic Diseases 

Perinatal conditions were responsible for 47.1 percent of 
total infant mortality, ranking first among the causes of 
reported deaths for those under one year old in 1988. The 
leading cause of mortality among children one to four years of 
age, at 24.5 percent of all deaths in 1988, was infectious and 
parasitic diseases, particularly diarrheal diseases. External 
causes, specifically traffic accidents and homicide, accounted 
for the greatest share of registered deaths for the cohort aged 
five to forty-nine. Among the elderly population sixty years and 
above, deaths resulting from diseases of the circulatory system 
amounted to the highest percentage (50.3) of the total in 1989. 
Those diseases were also the leading cause of mortality for the 
entire nation, with higher ratios in the wealthier Southeast 
(36.2 percent) and South (37.2 percent), relative to the impov- 
erished North (23.2 percent) and Northeast (29.3 percent). 
Although the proportion of deaths has shifted to older popula- 
tion groups, regional variations continue to hold, such that 
over a quarter of deaths afflicts the below-five age range in the 
North. 

Expanded immunization coverage in recent years has 
favored a drop in mortality ascribed to vaccine-preventable dis- 
eases, from 12.9 percent in 1979 to 2.4 percent in 1988. In 1993 
vaccination of Brazilian children less than one year old under 
the National Immunization Program reached 68.5 percent for 
diphtheria, pertussis, and tetanus, 92.3 percent poliomyelitis, 
77.7 percent measles, and 98 percent tuberculosis. Although 
tuberculosis persists as a principal source of morbidity and 
mortality, particularly with the onset of the human immunode- 
ficiency virus (HIV), its incidence and death rates have been 
steadily on the decline. 

Control measures have proven effective in reducing the 
prevalence and outbreak of other infectious and endemic dis- 



137 



Brazil: A Country Study 

eases, including cholera, Chagas' disease (American trypanoso- 
miasis), yellow fever, and schistosomiasis (bilharzia). However, 
the number of registered cases of malaria, which 42.9 percent 
of the Brazilian population is at risk of contracting (mainly in 
the Amazon region), grew from 52,000 cases per year in 1970 
to about 600,000 in the 1980s, with some improvement since 
then. Other communicable diseases either have been reintro- 
duced, as in the case of dengue (breakbone fever) since 1986. 
Infectious tropical diseases reflect poor sanitary conditions as 
well as discrepancies in the standard of living between North- 
ern and Southern Brazil, where such diseases ranked third and 
last, respectively, among the six leading causes of death in 
1989. 

Leprosy remains a serious problem in Brazil's high poverty 
areas, where the disease is spreading most rapidly. In October 
1996, an average of 100 new cases were being reported each 
day. As many as half a million Brazilians are afflicted with lep- 
rosy. 

The incidence of acquired immune deficiency syndrome 
(AIDS) in Brazil has also reached epidemic proportions, from 
490 in 1985 to 103,262 cumulative cases by March 1, 1997, the 
fourth highest reported prevalence in the world. Based on 
1996 data from the Pan American Health Organization 
(PAHO), homosexuals and/or bisexuals constitute 45 percent 
of the cumulative cases; intravenous drug users, 27 percent: 
heterosexuals, 20 percent; and others, 8 percent. The inci- 
dence was highest among young adults; 60 percent of those suf- 
fering from AIDS in 1994 were in the twenty-five to thirty-nine 
age-group. What began as a disease of homosexuals and recipi- 
ents of blood transfusions quickly spread to heterosexuals and 
intravenous drug users. HIV infection attributed to needle- 
sharing during drug use increased from 3.0 percent of the 
cases in 1986 to 24.5 percent in 1992-93 and from 5.0 percent 
to 23.4 percent for heterosexual transmission, altering the 
male-to-female ratio from 100:1 in the 1980s to 4:1 in 1994. 
The surge in the proportion of women contracting the virus 
has resulted in part from a rise in perinatal transmission, the 
predominant mode of infection for the 12,000 infants and chil- 
dren diagnosed with AIDS in 1994. 

The overall reduction in the number of new cases of the 
above infectious diseases, on the one hand, and the conspicu- 
ous rise in the incidence of chronic and degenerative diseases, 
on the other, indicate the occurrence of an epidemiological 



138 



The Society and Its Environment 



transition in Brazil. However, the transition is not complete; 
the two types coexist as major causes of death. Diseases of the 
circulatory system, including cerebrovascular and heart dis- 
eases, currently claim first place as the leading cause of death 
among the entire population (34.3 percent in 1989). The 
degenerative diseases have contributed to steep rises in the cost 
of health care, especially for the elderly. 

Nutrition and Diet 

Inadequate nutrition serves as a risk factor for morbidity and 
mortality from infectious diseases. Diarrheal and respiratory 
diseases, measles, tuberculosis, and malaria are the principal 
causes of death for malnourished children. The prevalence of 
malnutrition resulting from insufficient protein-energy diets 
among children under five years in Brazil in 1990 was 13.0 per- 
cent. Nevertheless, malnutrition within this age-group dropped 
substantially (61.4 percent) during the years 1975-88. Chronic 
malnutrition in 1989 characterized 15.4 percent of the entire 
population. The Northeast suffered from a greater rate of 
chronic malnutrition (27.3 percent) than the South (8.1 per- 
cent). The indigenous population's rate was twice that of low- 
income groups. 

Improvement in nutrition has been accompanied by 
changes in the typical Brazilian diet. The staples of the tradi- 
tional diet in Brazil are rice and beans, supplemented by what- 
ever meat may be available, and few, if any, green vegetables. In 
the Amazon region, the staple carbohydrate is manioc meal, 
usually eaten with fish. Bread and pasta have become impor- 
tant parts of the diet of low-income families, especially in urban 
areas, because of government subsidies for wheat. Advances in 
poultry-raising have led to lower prices and greater consump- 
tion of chicken and eggs as sources of protein. Urban and rural 
workers often take their home-made rice and bean lunches to 
work, although this practice in urban areas is being replaced by 
employer-provided meal tickets for use in restaurants or lun- 
cheonettes, including fast-food outlets. 

The Health Care System 

The constitution of 1988 and the Organic Health Law (Lei 
Organica de Saude) of 1990 universalized access to medical 
care, unified the public health system supported by the Minis- 
try of Health and the National Institute for Medical Assistance 
and Social Security (Instituto Nacional de Assistencia Medica 



139 



Brazil: A Country Study 

da Previdencia Social — INAMPS), and decentralized the man- 
agement and organization of health services from the federal 
to the state and, especially, municipal level. Between 1985 and 
1990, for example, the proportion of program funds managed 
by municipalities increased from 10 to 15 percent and by states 
from 23 to 33 percent. The sweeping health reforms that were 
initiated in the 1980s attempted to extend coverage to those 
outside the social security system. 

The constitution grants all Brazilian citizens the right to pro- 
cure free medical assistance from public as well as private pro- 
viders reimbursed by the government. While the public 
domain oversees basic and preventive health care, the private 
nonprofit and for-profit health care sector delivers the bulk of 
medical services, including government-subsidized inpatient 
care (that is, private facilities owned 71 percent of hospital 
beds designated for government-funded health care in 1993). 
This publicly financed, privately provided health system contin- 
ues to intensify its focus on high-cost curative care, driving hos- 
pital costs up by 70 percent during the 1980s. 

Therapeutic treatment in hospitals tends to dominate fund- 
ing at the expense of health promotion and disease prevention 
programs. Hospital-based assistance expanded from 44 percent 
(1985) to 77 percent (1990) of municipal health spending, 
while expenses for primary care decreased from 35 to 3 per- 
cent. Not only have basic and preventive health services for the 
entire population diminished, but the public health system also 
subsidizes expensive, high-technology medical procedures that 
consume 30 to 40 percent of health resources and often end 
up being used to attend affluent segments of the population. 
Despite an augmentation in hospital coverage, discrepancies in 
access and quality of health care among the five regions charac- 
terize the Single Health System (Sistema Unico de Saude — 
SUS); medical consultations average 1.3 per capita in the 
Northeast versus 2.3 in the Southeast. 

Although states and municipalities rapidly acquired more 
responsibility in administering health funds and facilities, the 
federal government retained the role of financing public 
health outlays. As stipulated by the 1988 constitution, govern- 
ment subsidies for health services are derived from the social 
security budget, which is predominantly based on earmarked 
taxes and contributions from employee payroll and business 
profits. The federal government consistently underwrote over 
three-quarters of all public spending on health in the 1980s, a 



140 




The Sarah Kubitschek Rehabilitation Center, Brasilia, named after the 

wife of former president Juscelino Kubitschek 
Courtesy Inter-American Development Bank, Washington 

sizable portion of which remunerated private medical charges. 
The percentage of total central government spending on 
health in 1990 was 6.7. Public health expenditures as a share of 
gross domestic product (GDP — see Glossary) in 1990 ranged 
from 2.1 to 3.1 percent, close to half of the total health expen- 
ditures of 5.8 percent. 

Private sources finance the other half of total health expen- 
ditures. Perceptions of inefficiency in the government reim- 
bursement schedule and deterioration in service quality of the 
public health system spurred a rapid growth in the private 
financing of health care during the 1980s, particularly in well- 
developed cities of the Southeast. The private sector covers 32 
million citizens (roughly 20 percent of the Brazilian popula- 
tion) and consists of several hundred firms offering four prin- 
cipal types of medical plans: private health insurance, prepaid 



141 



Brazil: A Country Study 

group practice, medical cooperatives, and company health 
plans. The group medical plans rank Brazil as the largest 
health maintenance organization (HMO) provider in Latin 
America; HMOs both finance and provide health care, but 
limit coverage to low-cost procedures and drive the burden of 
treating high-risk individuals to the publicly funded health sys- 
tem. 

Health Professionals and Resources 

Paralleling private insurance, human resources are dispro- 
portionately distributed in Brazil, with overrepresentation in 
the wealthy states. A strong demand for physicians persists in 
the Amazon region, while 61.5 percent of doctors are located 
in the Southeast. Physicians also dominate the health field, 
comprising 46.8 percent of the work force and serving an aver- 
age of 847 people per doctor between 1988 and 1991, while 
nurses (one for every 3,448 people) and other auxiliary per- 
sonnel lag behind in supply. 

Although most health establishments belong to the public 
sector (65.2 percent public and 34.8 percent private), more 
private institutions (43.2 percent) provide inpatient care than 
public (6.8 percent). These establishments range from federal, 
state, municipal, and university hospitals and health posts to 
private clinics. The distribution of hospitals and outpatient 
facilities favors the South and Southeast, at levels two to four 
times higher per capita than in the North and Northeast, 
where health conditions are more precarious and the need for 
health care is greater. The ratio of hospital beds per 1,000 pop- 
ulation has remained fairly constant between 1985 (3.9) and 
1990 (3.6), and is 33 percent higher than predicted in relation 
to Brazil's gross national product (GNP — see Glossary). 

Brazil has adopted new medical technologies from industri- 
alized countries. However, specialized and high-technology ser- 
vices benefit a minority of privileged patients. Many poor 
Brazilians, unable to afford hospital-based medical care, rely 
on both prescription and nonprescription medication to 
relieve their ailments. The national pharmaceutical market in 
1990 was valued at close to US$4 billion, 70.5 percent of which 
was earned by commercial pharmacies. Judging from the dis- 
proportionate availability of drugs and medical equipment to 
different income groups, universal and equitable access to 
health care remains a goal to be reached. 



142 



The Society and Its Environment 



Public Health and Welfare 

Social Security 

The Ministry of Social Security, now separate from the Bra- 
zilian health system as discussed above, carries out the conven- 
tional mandate of ensuring old-age assistance. Until the 1940s, 
social security was limited to private plans organized by employ- 
ers and employees. Over time, the components of the system 
became increasingly integrated and controlled by the federal 
government. More recently, health benefits and social security 
have become nearly universal, no longer depending on formal 
employment and contributions. Retirement and disability ben- 
efits are pegged to the official minimum wage. They weigh so 
heavily on government spending that they are one of the rea- 
sons the government resists raising the minimum wage for the 
active work force. At the same time, the middle class considers 
these benefits insufficient and, therefore, seeks private social 
security plans or makes investments in real estate, given the 
instability of financial markets in Brazil. The social security sys- 
tem will face even greater challenges as the age structure of the 
population changes, with a greater number of pensioners in 
relation to the number of contributing workers. 

Sanitation and Public Utilities 

The National Sanitation Plan (Piano Nacional de Sanea- 
mento — Planasa) of the 1970s did not keep pace with rapid 
urbanization in the development of safe drinking water sup- 
plies and waste disposal systems, particularly evident in the pre- 
carious metropolitan peripheries and favelas. Between 1988 
and 1993, 87 percent had access to piped water and 72 percent 
to sewerage and waste disposal services, yet a 1989 study by the 
IBGE (Brazilian Geography and Statistics Institute) revealed 
that 92 percent of the municipalities did not treat domestic 
wastewater and only 27.6 percent of dwellings in a Northeast 
metropolis were linked to a sewerage system that passed quality 
standards. 

The rural population receives far fewer water and sanitation 
services than its urban counterparts. Ninety-five percent of 
those in urban areas had adequate water supply during the 
1988-93 period, as compared with 61 percent of rural dwellers; 
the levels for disposal systems were 84 percent and 32 percent, 
respectively (the rural figures refer to wells and privies, not ser- 



143 



Brazil: A Country Study 

vice). To a certain extent, the urban-rural incongruity in the 
provision of environmental sanitation accounts for the higher 
percentage of deaths from diarrheal diseases in the rural North 
and Northeast than in the urban areas. The lack or deficiency 
of basic sanitation services has been associated with the persis- 
tence of diarrhea as well as outbreaks of contagious diseases, 
including cholera. 

Housing 

The National Housing Bank (Banco Nacional de Habi- 
tacao — BNH) was established in the 1960s to finance public 
housing using funds from savings accounts and from the offi- 
cial employment guarantee system, known as the Severance Pay 
Fund (Fundo de Garantia do Tempo de Servico — FGTS). 
Many thousands of basic houses (casas populares) were built, 
usually in projects at the edges or outside of cities. Because of 
the financial constraints of working with a low-income clien- 
tele, the federal Housing Finance System (Sistema Financeiro 
de Habitacao — SFH) has been used primarily to provide low- 
cost mortgages for houses and apartments for the middle class. 

Many poor people, without access to financing, find it neces- 
sary to build their own houses. The favelas on the hills of Rio 
de Janeiro are one well-known type. In other parts of Brazil, 
shantytowns on stilts are built over water (alagados) , or in 
marshy areas (baixadas) . In 1991 there were 3,221 medium- to 
large-size favelas (each with more than fifty-one households), 
which contained 2.9 percent of the country's households. The 
largest favelas, such as Rocinha in Rio de Janeiro, are home to 
hundreds of thousands. 

Education 

As in other areas of social life, education in Brazil is marked 
by great inequalities, with a highly developed university system 
at one extreme and widespread illiteracy at the other. Despite 
considerable progress in coverage, serious problems of quality 
remain. In 1995 the federal government was spending almost 
twice as much on the universities as on basic education, which 
is the primary responsibility of states and municipalities. Local 
governments often paid teachers wages that were well below 
the legal minimum. 

In 1990 there were 37.6 million students, as compared with 
10 million in 1964. Of the 1990 total, 3.9 million students were 



144 



A Sao Paulo State Sanitation Authority technician compares a flask of 
polluted water collected from the Tiete (in background) with a flask of 

clean water. 

Courtesy Inter-American Development Bank, Washington 

in preschool, 29.4 million in elementary school, 3.7 million in 
secondary school, and 1.7 million in university. Despite this 
progress, less than 40 percent of the high school-age popula- 
tion was enrolled in school. 

Because of the economic and social changes that have 
occurred in Brazil in recent decades, parents now place high 
value on education for their children. Availability of schools 
has become an important factor in deciding where to live and 
how to make a living, even in how many children to have. 

Literacy 

In 1990 it was estimated that 81 percent of the total popula- 
tion above age fifteen was literate, or 19 percent illiterate 



145 



Brazil: A Country Study 

(based on the inability to sign one's own name). The level of 
functional illiteracy — that is, the inability to read newspapers 
and write letters — was not measured but was certainly much 
higher (an estimated 60 percent). As with most social indica- 
tors, illiteracy is highest in rural areas of the Northeast and 
North, where the figures are comparable to those in Africa, 
and lowest in urban areas of the Southeast and South, where 
the figures are comparable with those in the developed world. 
For example, southern towns had an adult illiteracy rate of only 
10 percent in 1991, while the rate for children between the 
ages of eleven and fourteen was only 3 percent. 

Literacy is strongly associated with income. When the popu- 
lation is divided into five income strata, illiteracy is ten times 
greater in the stratum with the lowest income. The illiteracy 
rate rises by age- group. The 1991 census also showed a strong 
racial gradient, with illiteracy levels of 11.6 percent among 
whites, 27.4 percent among mulattoes, and 29.9 percent 
among blacks. Differences by gender were not strong. Because 
of disappointing results when the federal government under- 
took a nationwide adult literacy campaign, the Brazilian Liter- 
acy Movement (Movimento Brasileiro de Alfabetizacao — 
Mobral), the emphasis shifted in the 1960s and 1970s to reach- 
ing children through the school system. 

Primary and Secondary Schools 

In theory, public education is free at all levels in Brazil and is 
compulsory for ages seven to fourteen, but coverage is incom- 
plete and quality uneven. Private schools continue to meet a 
large part of the demand of those who can afford to pay. Gen- 
erally speaking, the private primary and secondary schools are 
for the upper and middle classes, while the public schools at 
these levels are attended by those in the lower socioeconomic 
strata. During the 1990s, rising costs and economic pressures 
made it necessary for some of the middle class to shift from pri- 
vate to public schools. 

The system of primary and secondary schools was restruc- 
tured during the 1970s and 1980s to consist of eight years of 
basic ("fundamental") education and three years of secondary 
school. The public schools at these levels are run by municipal- 
ities and states. In 1990 the Collor government adopted a sys- 
tem of integrated educational centers, which included day 
care, school lunches, and health care, called Integrated Cen- 
ters for Assistance to Children (Centros Integrados de Assisten- 



146 



The Society and Its Environment 



cia a Crianca — CIACs) and later renamed Centers for 
Comprehensive Attention to Children (Centros de Atencao 
Integrada a Crianca — CAICs) . These centers were based on the 
model developed in Rio de Janeiro State by the administration 
of Leonel de Moura Brizola, then governor of the state. How- 
ever, because of limited funds they could not be implemented 
throughout the country, and the validity of concentrating 
resources on a small number of beneficiaries was questioned. 

Between 1960 and 1990, enrollment rates for school-age 
children (seven to fourteen) increased from 50 percent to 90 
percent for the country as a whole. They varied considerably 
from one region or state to another and within regions and 
states. Coverage was highest in the Southeast and South and 
lowest in the Northeast. There were also racial differences. 
According to 1985 data, 91.4 percent of white children ages 
seven to nine were in school, as compared with only 74.6 per- 
cent of black children of those ages. 

One of the biggest educational problems in Brazil is school 
nonattendance. In wealthy states, 95 percent of children enroll 
from the start, while only 65 percent to 80 percent enroll in 
poor states. Approximately 25 percent drop out by the second 
year. UNICEF reported in mid-1994 that Brazil is in last place 
in a world ranking that compares the per capita income of 
each country with the rates of school nonattendance or absen- 
teeism in the first five grades. Given Brazil's considerable eco- 
nomic strength, one would expect at least 80 percent of the 
children to complete the fifth grade, but only 39 percent fin- 
ish, according to the UNICEF report. Often children from 
poor families start working from the age of ten in order to help 
their parents. Other reasons for school nonattendance include 
inadequate school facilities, the high examination failure rate, 
and malnutrition. 

One of the government initiatives at the national level that 
has improved attendance and nutrition is the school lunch pro- 
gram. Some local governments, such as that of the Federal Dis- 
trict, have experimented with providing payments to poor 
families of children who stay in school. 

Colleges and Universities 

The system of colleges and universities expanded rapidly in 
the 1970s and 1980s, reaching a total of 893 in 1993. Of these, 
ninety-nine were universities and 794 were isolated colleges or 
schools. Nearly all states have federal universities. The state 



147 



Brazil: A Country Study 



universities are less widespread, while the few municipal uni- 
versities or colleges are concentrated in large cities in the 
Southeast and South. The Southeast Region has nearly two- 
thirds of the country's colleges and universities. The number of 
undergraduate students admitted in Brazil in 1990 was 
407,148, of which 14.1 percent were in federal universities, 10.9 
percent in state universities, 5.9 percent in municipal universi- 
ties, and 69.0 percent in private institutions. The total number 
of students enrolled was about 1.5 million, and the number of 
graduates was 230,000. 

The best universities in Brazil generally include the Univer- 
sity of Sao Paulo (Universidade de Sao Paulo — USP), the 
Campinas State University (Universidade Estadual de Campi- 
nas — Unicamp), the Federal University of Rio de Janeiro (Uni- 
versidade Federal do Rio de Janeiro — UFRJ), the University of 
Brasilia (Universidade de Brasilia — UnB), and the Federal Uni- 
versity of Minas Gerais (Universidade Federal de Minas 
Gerais — UFMG), all of which are public. The private Pontifical 
Catholic University of Rio de Janeiro (Pontiffcia Universidade 
Catolica do Rio de Janeiro — PUC-RJ) is also highly ranked. 
Public universities are free and do not charge tuition. Private 
colleges and universities, which charge tuition, grew very rap- 
idly during the 1970s to meet the enormous demands of a 
growing middle class. 

Because of the great demand for higher education and the 
limited resources, both public and private colleges (faculdades) 
and universities in Brazil require an entrance examination ( ves- 
tibular). Passing these examinations often necessitates private 
college-preparatory courses, which only the upper and middle 
socioeconomic strata can afford. On completion of a full aca- 
demic course of study, university students may obtain a bache- 
lor's degree (bacharelado) and may also study an additional year 
to receive a teaching degree ( licenciatura) . 

The choice of majors or specialties is not well-aligned with 
the job market. According to a 1993 IPEA study, two out of 
three students were in the social sciences or humanities, as 
opposed to scientific or technical fields. The study also con- 
cluded that four out of ten students dropped out before gradu- 
ation and that those who graduated took an average of eight 
years to finish. Many of these had difficulty paying for tuition, 
or living expenses, and many who gave up before graduation 
realized that they were not being well prepared for the job mar- 
ket (see Research and Development, ch. 6). 



148 



The Society and Its Environment 



Graduate study grew rapidly during the 1970s and 1980s. In 
1991 Brazil had 973 master's programs in almost all areas, with 
39,401 students, as well as 465 doctoral programs with 12,862 
students. Because of this growth, along with budget constraints, 
the government restricted fellowships for university study 
abroad, which had made it possible for about 20,000 Brazilians 
to obtain their advanced degrees in the United States and 
Europe. 

Principal Research Libraries 

The strongest university libraries are at USP, UFRJ, and UnB. 
Researchers also have access to the National Library (Biblio- 
teca Nacional) in Rio de Janeiro and the Library of Congress of 
Brazil (Biblioteca do Congresso do Brasil) in Brasilia. The 
National Library is the equivalent of the United States Library 
of Congress, but the Library of Congress of Brazil is increas- 
ingly important. Brazilian libraries gradually are becoming 
computerized and linked to international information net- 
works. 

Social Conflict and Participation 

Conflict and Nonviolence 

While avoiding open conflict, Brazilian society has gone 
through transitions that in general have moved in the direction 
of modernization and democracy. Considering the decimation 
of Indian populations and the maintenance of African slavery 
long after it had been abolished elsewhere in the Americas, 
Brazil's colonial and imperial history was characterized by vio- 
lence. At the same time, however, there is a strong Brazilian tra- 
dition of nonviolent resolution of conflicts. There was no war 
of independence against Portugal, but only local or regional 
conflicts, such as the Cabanagem (1835) in the Amazon, the 
War of the Farrapos (1845) in Rio Grande do Sul, and the Sao 
Paulo Civil War (1932) (see The Empire, 1822-89; The Repub- 
lican Era, 1889-1985, ch. 1). Although Brazil participated in 
the Paraguayan War, also known as the War of the Triple Alli- 
ance (1864-70), most conflicts with neighboring countries 
were solved peacefully. The transition from empire to republic 
in 1889 was also relatively smooth. There was no generalized 
civil war, but there were isolated events, such as the resistance 
of a millenarian group at Canudos in the Northeast, described 
in Euclydes da Cunha's classic Os sertdes, translated as Rebellion 



149 



Brazil: A Country Study 

in the Backlands. In contrast to Spanish America, which fought 
protracted revolutionary wars and split into many separate 
countries, Portuguese America held together in one huge 
country. Although there were many violent episodes, Brazilian 
history, on the whole, has been remarkably peaceful. 

Despite its nonbelligerent heritage at the national level, Bra- 
zilian life is marked by considerable violence on a day-to-day 
basis. Indians and slaves, or their descendants, have always 
been victimized. The rural bandits (cangaceiros) of the North- 
east, of whom Lampiao is the most famous, battled rival groups 
and backlands colonels in the early 1900s. In the post-World 
War II period, the struggle for land pitted rural workers and 
their leaders against the landowners and their hired gunmen, 
resulting in the murder of leaders and even priests, most nota- 
bly in frontier areas. Chico Mendes, a rubber-tapper leader 
killed in Acre in 1988, was the most widely known among hun- 
dreds of victims. In 1995 and 1996, there were massacres of 
landless workers in Rondonia and Para. In urban areas, espe- 
cially the largest, violence has become commonplace, with fre- 
quent thefts, robberies, break-ins, assaults, and kidnappings. 
The police themselves are sometimes involved in criminal activ- 
ities. In Rio de Janeiro, the government has little control over 
the favelas, which are dominated by gangs that control infor- 
mal gambling (a numbers game called jogo do bicho) and drug 
trafficking as well as influence local politics. 

For the most part, contemporary violence cannot easily be 
construed as a class struggle, at least as a struggle that involves 
collective consciousness and action. It is essentially particularis- 
tic and opportunistic at the individual level, although it often 
reflects perceptions of social injustice. Avoidance of more orga- 
nized conflict between the privileged and the poor in Brazil 
can be attributed in part to the corporatist (see Glossary) sys- 
tem set up during the regime of Getulio Dorneles Vargas (pres- 
ident, 1930-45, 1951-54) in the 1930s and 1940s. This system 
was designed to preempt direct class confrontation through 
well-controlled concessions to workers. The system of govern- 
ment-regulated labor unions and clientelism (see Glossary) 
reached its limits in the 1960s. In 1964 a bloodless military 
coup prevented it from going farther in the direction of the 
dispossessed. 

The authoritarian military regime, which lasted from 1964 
until 1985, used torture and killing to repress opposition, 
including cases of armed struggle between 1966 and 1975, but 



150 




The Catholic University ofPetropolis (Pontificia Universidade Catolica 

de Petrdpolis) , Rio de Janeiro State 
Courtesy Jaklen Muoi Tuyen 

was gradually worn down by democratic pressures and sheer 
fatigue. From 1976 until 1994, political efforts on the right and 
the left focused on redemocratization, with greater popular 
participation. Revolution and repression were set aside. Once 
again, a major transition occurred with relatively little violence, 
at least as compared with Chile and Argentina, for example. 

Growth of Social and Environmental Movements 

In contrast to developed countries, Brazil had few organiza- 
tions — interest groups, associations, leagues, clubs, and 
NGOs — up until the 1970s. This lack of mediation between 
government and society was characteristic of a paternalistic 
and authoritarian social structure with a small but powerful 
elite and a dispossessed majority. During the 1970s and early 
1980s, however, in part because of the growth of the middle 
class, a wide variety of social movements and local and national 
organizations appeared and expanded. Many engaged in some 
kind of political activity. Women's groups also appeared. 
Increasingly, social and political organizations reached into the 
lower classes. A significant number were connected directly or 



151 



Brazil: A Country Study 

indirectly to the Roman Catholic Church, which sponsored 
CEBs (Ecclesiastical Base Communities) as part of its "option 
for the poor." Independent labor movements also grew during 
the 1980s. People took to the streets in 1984 to press for direct 
elections for president, as they did in 1992 to demand the 
impeachment of President Collor de Mello. 

Once a new constitution was written in 1988 and a president 
was chosen through direct elections in 1989, opposition or 
resistance movements were forced to redefine their roles. Many 
of them made a transition from protest and denunciation to 
providing more constructive contributions in the areas of 
health, education, and social services. Others organized pres- 
sure on government agencies. A 1994 study showed that some 
5,000 NGOs are dedicated to: the environment (40 percent), 
social change (17 percent), women's causes (15 percent), and 
racial issues (11 percent), among other causes (17 percent). As 
a rule, these movements are organized around the interests of 
neighborhoods or broad concerns that cut across social class 
lines. Most are small, voluntary organizations that operate at 
the local level and provide assistance, but there are also large 
professional NGOs, such as the Brazilian Institute of Social and 
Economic Analysis (Instituto Brasileiro de Analise Social e 
Economica — IBASE) and the Federation of Social and Educa- 
tional Assistance Agencies (Federacao de Orgaos para Assisten- 
cia Social). Some of the large NGOs are connected to 
international NGOs, and many receive donations from abroad 
(dues are not customary). Various associations of national and 
regional NGOs have also developed. 

Collaboration between social and environmental move- 
ments, in what has been called "socio-environmentalism," 
reflects a Brazilian belief that concerns with the environment 
are inseparable from concerns with development, social equity, 
and justice. In this view, human and environmental degrada- 
tion have common causes, and their solution requires the 
same sort of action. 

Inclusion and Exclusion 

Critical interpretations of Brazil's social situation in the 
1980s and 1990s point to what is seen as a deepening of the 
economic crisis and the growth of misery and hunger. These 
interpretations are based on a series of observations and evi- 
dence that includes loss of value of the real minimum wage as a 
result of inflation, high unemployment levels, widespread 



152 



The Society and Its Environment 



informal economic activity, cutbacks in government spending 
on social programs, and mapping of indigence carried out by 
IPEA in 1990. They also take into account the more visible 
signs of discrimination and deprivation, such as favelas, camps 
of landless workers, urban violence, street children, and epi- 
demics of diseases such as cholera and dengue. 

However, social indicators on such phenomena as infant 
mortality, school enrollment, piped water, nutritional status, 
and protein consumption improved significantly in the 1980s 
and early 1990s. The improvements have resulted in no small 
measure from government investments in the social area since 
the 1970s. These have been called "compensatory social poli- 
cies" because they seem to have been designed to compensate 
for the economic policies that favor income concentration. 
Although they were insufficient, the investments had unques- 
tionably positive effects. To some extent, the benefits also can 
be attributed to fertility decline, which has biological and socio- 
economic effects, and to technological development in the 
areas of health services and food production. 

The apparent contradiction between negative and positive 
socioeconomic trends can be explained in part by the greater 
visibility of poverty, which has grown most in urban areas, while 
the above-mentioned benefits are more diffuse and less visible. 
However, the problems are not only because of perceptions or 
misreadings. The basic explanation for the contradiction is the 
coexistence of simultaneous processes of inclusion and exclu- 
sion. Inclusion resulted from extension to the lower middle 
class, by means of the labor and consumer markets and public 
services, of some of the benefits of development previously 
restricted to the upper and upper-middle strata. They have 
gained from participation in the labor market or markets for 
their goods and services and from government-provided ser- 
vices, such as education, health, and sanitation. In the simplest 
terms, the quantity of coverage has increased, although serious 
problems of quality remain, and the lowest strata continue to 
be excluded from integral participation in markets and full 
access to government services. 

The perception of crisis is accentuated by the fact that social 
mobility slowed down considerably in relation to the rapid 
expansion of the upper middle class in the 1960s and 1970s. 
According to national surveys of household expenditures, 47 
percent of the heads of household questioned in 1973 said that 
they were better off than their parents. In 1988 the proportion 



153 



Brazil: A Country Study 

fell to 38 percent, and 60 percent responded that they were the 
same or worse off than their parents. 

In sum, social polarization persists, but it is no longer a dual- 
ity. Its boundaries are multiple and mobile, depending on the 
dimension, and remain poorly denned. There is a vast middle 
ground that defies simple analyses and explanations and 
includes the upwardly and the downwardly mobile. 

Macroeconomic policies aimed at stabilization and competi- 
tive insertion of Brazil into global markets contribute to slower 
economic growth and structural unemployment, which in turn 
worsen exclusion. At the same time, government authorities 
have stated their intention to give priority to social equity, the 
reduction of regional inequalities, and the defense of human 
and citizen rights. Effective achievement of these goals, to the 
extent that economic conditions permit, depends on appropri- 
ate analysis, political will, and especially the ability of citizens to 
make their demands clear. 

It is unclear whether never-ending economic and political 
crises, disasters, and scandals will provoke disillusionment with 
the redemocratization process and with Brazil's future, or 
whether Brazilian society will continue to change in the direc- 
tion of greater equilibrium within society and between society 
and the environment. There are important signs that signifi- 
cant change is underway. The campaign against hunger and 
misery and for citizens' rights launched by Herbert "Betinho" 
de Souza, a sociologist, made many Brazilians aware of the pov- 
erty that surrounds them and made clear that economic 
growth or government benefits alone will not solve their prob- 
lems. The process of decentralization opened up opportunities 
for participation but raised questions about pork-barreling, 
accountability, and the ability of local governments and civil 
society to make and implement informed decisions. The ques- 
tion is to what extent the progressive forces will prevail so that 
even if inequality persists, it will not be attributed to a failure of 
Brazilian society to respond. 

* * * 

While taking into account the contributions of foreign Bra- 
zilianists, this chapter draws heavily on the work (in Portu- 
guese) of Brazilian authors. The most basic references in 
English are Thomas Lynn Smith's Brazil: People and Institutions, 
now quite dated; Charles Wagley's revised edition of An Intro- 



154 



The Society and Its Environment 



duction to Brazil; Mark Carpenter's Brazil: An Awakening Giant; 
and Ronald M. Schneider's Brazil: Culture and Politics in a New 
Industrial Powerhouse. 

For social aspects of the Amazon, in addition to the work of 
the geographers mentioned above, Wagley's Amazon Town is a 
classic. His Man in the Amazon and Marianne Schmink and 
Charles H. Wood's Frontier Expansion in Amazonia are useful 
edited volumes. The latter authors' study entitled Contested 
Frontiers and Alexander Cockburn and Susanna Hecht's Fate of 
the Forest provide some of the best analyses of recent social and 
environmental trends. Manoel Correa de Andrade has written 
classic analyses of the land and people of the Northeast. Albert 
O. Hirschman's Journeys Toward Progress describes government 
efforts to deal with the region's droughts. 

Sociological perspectives on environmental problems and 
policies in Brazil are provided in Dilemas socioambientais e desen- 
volvimento sustentdvel, edited by Daniel Hogan and Paulo Vieira 
da Cunha, and Populacao, meio ambiente e desenvolvimento, edited 
by George Martine. Perceptions of environmental issues 
among leaders and the general public are analyzed in Samyra 
Crespo and Pedro Leitao's que o brasileiro pensa sobre meio ambi- 
ente. Authors who have written about Brazilian environmental 
problems and policies in English include Martine, Hecht, 
Ermlio Moran, Peter May, and John O. Browder. 

The basic reference in English on various aspects of popula- 
tion in Brazil is Charles H. Wood and Jose Alberto Magno de 
Carvalho's The Demography of Inequality in Brazil. The historical 
record is presented by Thomas Merrick and Douglas Graham 
in Population and Economic Development in Brazil: 1800 to the 
Present. For specific aspects of population dynamics, see Mer- 
rick and Martine. 

Economic and social trends are analyzed in Edmar L. Bacha 
and Herbert S. Klein's edited volume, Social Change in Brazil, 
1945-1985. Brazilian social scientists, such as Fernandes and 
Fernando Henrique Cardoso, have produced excellent studies 
on social class in Brazil. Rural class relations are discussed by 
David Goodman and Michael Redclift. Urban class relations in 
Brazil have been dealt with mostly by numerous social scientists 
based in Rio de Janeiro and Sao Paulo, including Francisco 
Weffort and Jose Alvaro Moises. 

The starting point for analysis on race relations in Brazil is 
Gilberto Freyre's The Masters and the Slaves, followed by The 
Mansions and the Shanties. Thomas E. Skidmore's study, Black 



155 



Brazil: A Country Study 

into White, dispels some of the ideology of racial democracy. 
Race, Class and Power in Brazil, edited by Pierre-Michel Fon- 
taine, offers a political perspective. 

John Hemming provides a detailed historical account of 
Amerindians in Brazil in Red Gold, and Shelton H. Davis criti- 
cizes the situation existing in the 1970s in Victims of the Miracle. 
A recommended 1992 study is Manuela Carneiro da Cunha's 
Historia dos Indios do Brasil The indigenous languages are cata- 
logued in Barbara F. Grimes's Ethnologue. 

Wagley's An Introduction to Brazil is an authoritative starting 
point on unity and diversity of culture in Brazil in the postwar 
period. Family and kinship have been analyzed by among oth- 
ers, Aspasia Camargo. Gender is a more recent concern. 
Authors who have written on this issue include Heleieth LB. 
Saffioti. The volume Mulheres Latinoamericanas em dados: Brasil 
contains statistical data on women in Brazil. The Carlos Chagas 
Foundation in Sao Paulo publishes regularly on women's 
issues. 

Studies of religion in Brazil have been limited for the most 
part to specific topics. In Miracle at Joaseiro, Ralph Delia Cava 
writes on traditional Catholicism in the Northeast and the wor- 
ship of Padre Cicero. Seth Leacock and Ruth Leacock's Spirits 
of the Deep is an example in English of the literature on Afro- 
Brazilian traditions. 

The section on health status and health care draws heavily 
from studies by the PAHO. Statistical analyses of diseases, nutri- 
tion, and health-care resources are taken from reports pub- 
lished by the UNDP, the World Bank, and the Inter-American 
Development Bank. Foreign and Brazilian authorities on the 
national health-care system are also cited. (For further infor- 
mation and complete citations, see Bibliography.) 



156 



Chapter 3. The Economy 



A nineteenth-century wood carving made by an indigenous Brazilian tribe, 
from Hjalmar Stolpe, Amazon Indian Designs from Brazilian and Gui- 
anan Wood Carvings 



FROM PORTUGAL'S DISCOVERY of Brazil in 1500 until the 
late 1930s, the Brazilian economy relied on the production of 
primary products (see Glossary) for exports. Portugal sub- 
jected Brazil to a sternly enforced colonial pact, or imperial 
mercantile policy, which for three centuries heavily curbed 
development. The colonial phase left strong imprints on the 
country's economy and society, lasting long after indepen- 
dence in 1822. Measurable changes began occurring only late 
in the eighteenth century, when slavery was eliminated and 
wage labor was adopted. Important structural transformations 
began only in the 1930s, when the first steps were taken to 
change Brazil into a modern, semi-industrialized economy. 

These transformations were particularly intense between 
1950 and 1981, when the growth rates of the economy 
remained quite high and a diversified manufacturing base was 
established. However, since the early 1980s the economy has 
experienced substantial difficulties, including slow growth and 
stagnation. Nevertheless, Brazil still has the potential to regain 
its former dynamism. In the mid-1990s, it had a large and quite 
diversified economy, but one with considerable structural, as 
well as short-term, problems. 

Socioeconomic transformation took place rapidly after 
World War II. In the 1940s, only 31.3 percent of Brazil's 41.2 
million inhabitants resided in towns and cities; by 1991, of the 
country's 146.9 million inhabitants 75.5 percent lived in cities, 
and Brazil had two of the world's largest metropolitan cen- 
ters — Sao Paulo and Rio de Janeiro. The rate of population 
growth decreased from about 3 percent annually in the 1950s 
and 1960s to 1.9 percent annually in the 1980-91 period, indi- 
cating that Brazil was in a demographic transition. By mid-1997 
Brazil had an estimated population of 159.9 million. 

The share of the primary sector (see Glossary) in the gross 
national product (GNP — see Glossary) declined from 28 per- 
cent in 1947 to 11 percent in 1992. Despite this reduction, the 
agricultural sector remains important. Although part of it is 
primitive and intensive, part is modern and dynamic. Brazil 
remains one of the world's largest exporters of agricultural 
products. 

In the same 1947-92 period, the contribution of industry to 
GNP increased from less than 20 percent to 39 percent. The 



159 



Brazil: A Country Study 

industrial sector produces a wide range of products for the 
domestic market and for export, including consumer goods, 
intermediate goods (see Glossary), and capital goods (see Glos- 
sary). By the early 1990s, Brazil was producing about 1 million 
motor vehicles annually and about 32,000 units of motor- 
driven farming machines. On an annual basis, it was also pro- 
ducing 1.8 million tons of fertilizers, 4.7 million tons of card- 
board and paper, 20 million tons of steel, 26 million tons of 
cement, 3.5 million television sets, and 3 million refrigerators. 
In addition, about 70 million cubic meters of petroleum were 
being processed annually into fuels, lubricants, propane gas, 
and a wide range of petrochemicals. Furthermore, Brazil has at 
least 161,500 kilometers of paved roads and more than 63 mil- 
lion megawatts of installed electric power capacity. 

Despite these figures, the economy cannot be considered 
developed. Although the economic changes since 1947 raised 
the country's per capita income above US$2,000 in 1980, per 
capita income in 1995 was still only US$4,630. Growth and 
structural change have not altered significantly Brazil's 
extremely unequal distribution of wealth, income, and oppor- 
tunity. Despite impressive increments in economic growth and 
output, the number of poor has risen sharply. Most of the poor 
are concentrated in the rural areas of Brazil's Northeast (Nor- 
deste) Region, or in the country's large cities or metropolitan 
areas. The economic and political troubles of the 1980s and 
early 1990s have only complicated the task of correcting the 
country's development pattern. 

Historical Background and Economic Growth 

The Colonial Period 

Portugal's exploitation of Brazil stemmed from the Euro- 
pean commercial expansion of the fifteenth and sixteenth cen- 
turies (see The Colonial Era, 1500-1815, ch. 1). Blocked from 
the lucrative hinterland trade with the Far East, which was 
dominated by Italian cities, Portugal began in the early fif- 
teenth century to search for other routes to the sources of 
goods valued in European markets. Portugal discovered the 
maritime passage to the East Indies around the southern tip of 
Africa and established a network of trade outposts throughout 
Africa and Asia. After the discovery of America, it competed 
with Spain in occupying the New World (see the Indigenous 
Population, ch. 1). 



160 



The Economy 



Initially, the Portuguese did not find mineral riches in their 
American colony, but they never lost the hope of someday find- 
ing such riches there. Meanwhile, in order to settle and defend 
the colony from European intruders, the Portuguese estab- 
lished a pioneer colonial enterprise: the production of sugar in 
the Northeast. Beginning in about 1531, cattle began arriving 
in Brazil, and a cattle industry developed rapidly in response to 
the needs of the sugar industry for transportation and food for 
workers. The discovery of precious metals in the colony's Cen- 
ter-South (Centro-Sul), a relatively undefined region encom- 
passing the present-day Southeast (Sudeste) and South (Sul) 
regions, came only in the eighteenth century. 

The Sugar Cycle, 1540-1640 

By the mid-sixteenth century, Portugal had succeeded in 
establishing a sugar economy in parts of the colony's northeast- 
ern coast. Sugar production, the first large-scale colonial agri- 
cultural enterprise, was made possible by a series of favorable 
conditions. Portugal had the agricultural and manufacturing 
know-how from its Atlantic islands and manufactured its own 
equipment for extracting sugar from sugarcane. Furthermore, 
being involved in the African slave trade, it had access to the 
necessary manpower. Finally, Portugal relied on the commer- 
cial skills of the Dutch and financing from Holland to enable a 
rapid penetration of sugar in Europe's markets. 

Until the early seventeenth century, the Portuguese and the 
Dutch held a virtual monopoly on sugar exports to Europe. 
However, between 1580 and 1640 Portugal was incorporated 
into Spain, a country at war with Holland. The Dutch occupied 
Brazil's sugar area in the Northeast from 1630 to 1654, estab- 
lishing direct control of the world's sugar supply. When the 
Dutch were driven out in 1654, they had acquired the technical 
and organizational know-how for sugar production. Their 
involvement in the expansion of sugar in the Caribbean con- 
tributed to the downfall of the Portuguese monopoly. 

The Caribbean sugar boom brought about a steady decline 
in world sugar prices. Unable to compete, Brazilian sugar 
exports, which had peaked by the mid-seventeenth century, 
declined sharply. Between the fourth quarter of the seven- 
teenth century and the early eighteenth century, Portugal had 
difficulties in maintaining its American colony. The downfall of 
sugar revealed a fragile colonial economy, which had no com- 
modity to replace sugar. Paradoxically, however, the period of 



161 



Brazil: A Country Study 

stagnation induced the settlement of substantial portions of 
the colony's territory. With the decline of sugar, the cattle sec- 
tor, which had evolved to supply the sugar economy with ani- 
mals for transport, meat, and hides, assimilated part of the 
resources made idle, becoming a subsistence economy. 
Because of extensive cattle production methods, large areas in 
the colony's interior were settled. 

Realizing that it could maintain Brazil only if precious min- 
erals were discovered, Portugal increased its exploratory efforts 
in the late seventeenth century. As a result, early in the eigh- 
teenth century gold and other precious minerals were found. 
The largest concentration of this gold was in the Southeastern 
Highlands, mainly in what is now Minas Gerais State. 

The Eighteenth-Century Gold Rush 

As a result of the mineral discoveries, settlers flocked to the 
gold region, and growing numbers of slaves were transferred 
from the sugar areas and brought in from Africa. Gold mining 
was mainly alluvial panning, a labor-intensive activity. The 
extraction of gold increased rapidly until the 1750s when gold 
exports peaked. After the gold deposits became depleted and 
exports declined sharply in the last quarter of the eighteenth 
century, the Brazilian economy entered another long period of 
stagnation. 

The gold surge did not establish a basis for economic expan- 
sion after the depletion of the mines. The economic regression 
was especially bad because of the restrictions Portugal had 
imposed on the establishment of manufacturing in the colony. 
However, the gold rush had an important impact in shaping 
Brazil's territory. First, the various exploratory expeditions led 
to the incorporation of large areas originally belonging to 
Spain. In addition, the demand for food and animals for trans- 
portation and meat had major repercussions outside the min- 
ing region. The mines were located in inhospitable, 
mountainous terrain, and the movement of goods to and from 
the mines depended heavily on mules. Agricultural activities 
were expanded elsewhere in order to feed the miners. Thus, 
the gold rush brought about the occupation of, and interaction 
among, different geographical areas. Moreover, the colony's 
economic and administrative center of gravity moved to the 
Southeast Region. Gold was shipped through ports in or near 
Rio de Janeiro, prompting the transfer of the colonial adminis- 
tration from the Bahian town of Salvador to Rio de Janeiro. 



162 



The Economy 



The difficult period resulting from the depletion of the 
mines lasted well into the second quarter of the nineteenth 
century. The mainstays of the economy were in decline, and 
the colony fell into a state of depression and decadence. In the 
late eighteenth century, Brazil experienced a brief surge in cot- 
ton exports to Britain, as the War of Independence in America 
disrupted American trade temporarily; however, Brazilian cot- 
ton lost its place in the world market by the early nineteenth 
century. 

The Economy at Independence, 1822 

Despite Brazil's economic troubles, the early nineteenth cen- 
tury was a period of change. First, the Napoleonic Wars forced 
the Portuguese royal family to flee to Brazil in 1808, and for a 
short period the colony became the seat of the Portuguese 
empire (see The Kingdom of Portugal and Brazil, 1808-21, ch. 
1). Moreover, in 1808 Britain persuaded Portugal to open the 
colony to trade with the rest of the world, and Portugal 
rescinded its prohibition against manufacturing. These events 
paved the way for Brazil's independence on September 7, 1822. 

Brazil's early years as an independent nation were extremely 
difficult. Exports remained low, and the domestic economy was 
depressed. The only segment that expanded was the subsis- 
tence economy. Resources (land, slaves, and transport animals) 
made idle by the decline of the export economy were absorbed 
into mostly self-consumption activities. 

The Coffee Economy, 1840-1930 

The impact of coffee on the Brazilian economy was much 
stronger than that of sugar and gold. When the coffee surge 
began, Brazil was already free from the limitations of colonial- 
ism. Moreover, the substitution of wage labor for slave labor 
after 1870 meant an increase in efficiency and the formation of 
a domestic market for wage goods. Finally, the greater com- 
plexity of coffee production and trade established important 
sectorial linkages within the Brazilian economy. 

Coffee was introduced in Brazil early in the eighteenth cen- 
tury, but initially it was planted only for domestic use. It took 
the high world prices of the late 1820s and early 1830s to turn 
coffee into a major export item. During the initial phase, pro- 
duction was concentrated in the mountainous region near Rio 
de Janeiro. This area was highly suitable for coffee cultivation, 
and it had access to fairly abundant slave labor. Moreover, the 



163 



Brazil: A Country Study 

coffee could be transported easily on mule trains or on animal- 
drawn carts over short distances to the ports. 

An entrepreneurial class established in Rio de Janeiro dur- 
ing the mining surge was able to induce the government to 
help create basic conditions for the expansion of coffee, such 
as removing transportation and labor bottlenecks. From the 
area near Rio de Janeiro, coffee production moved along the 
Paraiba Valley toward Sao Paulo State, which later became Bra- 
zil's largest exporting region. Coffee was cultivated with primi- 
tive techniques and with no regard to land conservation. Land 
was abundant, and production could expand easily through 
the incorporation of new areas. However, it soon became nec- 
essary to ease two basic constraints: the lack of transportation 
and the shortage of labor. 

The cultivation of coffee farther away from ports required 
the construction of railroads, first around Rio de Janeiro and 
into the Paraiba Valley, and later into the fertile highlands of 
Sao Paulo. In 1860 Brazil had only 223 kilometers of railroads; 
by 1885 this total had increased to 6,930 kilometers. The main 
rail link between Sao Paulo's eastern highlands and the ocean 
port of Santos allowed for a rapid expansion of coffee into the 
center and northwest of the state. 

After the initial coffee expansion, the availability of slaves 
dwindled, and further cultivation required additional slaves. 
However, by 1840 Brazil was already under pressure to abolish 
slavery, and a series of decrees were introduced, making it 
increasingly difficult to supply the new coffee areas with servile 
labor. In the 1870s, the shortage of labor became critical, lead- 
ing to the gradual incorporation of free immigrant labor. The 
coffee expansion in the west-northwest of Sao Paulo State after 
1880 was made possible largely by immigrant labor. In 1880 Sao 
Paulo produced 1.2 million 60-kilogram coffee bags, or 25 per- 
cent of Brazil's total; by 1888 this proportion had jumped to 40 
percent (2.6 million bags); and by 1902, to 60 percent (8 mil- 
lion bags). In turn, between 1884 and 1890 some 201,000 
immigrants had entered Sao Paulo State, and this total jumped 
to more than 733,000 between 1891 and 1900. Slavery was abol- 
ished in 1888. 

The Brazilian economy grew considerably in the second half 
of the nineteenth century. Coffee was the mainstay of the econ- 
omy, accounting for 63 percent of the country's exports in 
1891. However, sugar, cotton, tobacco, cocoa, and, at the turn 
of the century, rubber were also important. During the first 



164 




Aplatanilla (heliconia wagneriana-musaceae) tropical plant on the 
Fazenda Marimbondo of conservationist Jorge Schweizer, Parana State 
A tropical hardwood tree (ficus benjamin) on the Fazenda Marimbondo 

Courtesy Jon Barlow Hudson 



165 



Brazil: A Country Study 

three decades of the twentieth century, the Brazilian economy 
went through periods of growth but also difficulties caused in 
part by World War I, the Great Depression, and an increasing 
trend toward coffee overproduction. The four-year gap 
between the time a coffee tree is planted and the time of the 
first harvest magnified cyclical fluctuations in coffee prices, 
which in turn led to the increasing use of government price 
supports during periods of excess production. The price sup- 
ports induced an exaggerated expansion of coffee cultivation 
in Sao Paulo, culminating in the huge overproduction of the 
early 1930s. 

The 1840 to 1930 period also saw an appreciable but irregu- 
lar expansion of light industries, notably textiles, clothing, food 
products, beverages, and tobacco. This expansion was induced 
by the growth in income, by the availability of foreign 
exchange, by fiscal policies, and by external events, such as 
World War I. Other important factors were the expansion of 
transportation, the installed capacity of electric energy, 
increased urbanization, and the formation of a dynamic entre- 
preneurial class. However, the manufacturing growth of the 
period did not generate significant structural transformations. 

Economic growth in the nineteenth century was not shared 
equally by the regions. Development and growth were concen- 
trated in the Southeast. The South Region also achieved con- 
siderable development based on coffee and other agricultural 
products. The Amazon Basin experienced a meteoric rise and 
fall of incomes from rubber exports. The Northeast continued 
to stagnate, with its population living close to the subsistence 
level. 

A Period of Sweeping Change, 1 930-45 

The decade of the 1930s was a period of interrelated politi- 
cal and economic changes. The decade started with the 1930 
revolution, which abolished the Old Republic (1889-1930), a 
federation of semiautonomous states. After a transitional 
period in which centralizing elements struggled with the old 
oligarchies for control, a coup in 1937 established the New 
State (Estado Novo) dictatorship (1937-45) (see The Era of 
Getulio Vargas, 1930-54, ch. 1). 

To a large extent, the revolution of 1930 reflected a dissatis- 
faction with the political control exercised by the old oligar- 
chies. The political unrest of the first half of the 1930s and the 
1937 coup were influenced strongly by the onset of economic 



166 



The Economy 



problems in 1930. The coffee economy suffered from a severe 
decline in world demand caused by the Great Depression and 
an excess capacity of coffee production created in the 1920s. As 
a result, the price of coffee fell sharply and remained at very 
low levels. Brazil's terms of trade (see Glossary) deteriorated 
significantly. These events, and a large foreign debt, led to an 
external crisis that took almost a decade to resolve. 

The external difficulties had far-reaching consequences. 
The government was forced to suspend part of the country's 
debt payments and eventually to impose exchange controls. 
Excess coffee production led to increasing interventions in the 
coffee market. The state programs to support coffee prices 
went bankrupt in 1930. To avoid further decreases in coffee 
prices, the central government bought huge amounts of cof- 
fee, which was then destroyed. Central government interven- 
tion provided support to the coffee sector and, through its 
linkages, to the rest of the economy. 

Despite the economic difficulties, the income maintenance 
scheme of the coffee support program, coupled with the 
implicit protection provided by the external crisis, was respon- 
sible for greater industrial growth. Initially, this growth was 
based on increased utilization of the productive capacity and 
later on moderate spurts of investment. The initial import-sub- 
stitution industrialization (see Glossary) that occurred espe- 
cially during World War I did not lead to industrialization; it 
became a process of industrialization only in the 1930s. 

The 1930s also saw a change in the role of government. 
Until then, the state acted primarily in response to the 
demands of the export sector. During the first half of the 
decade, it was forced to interfere swiftly in an attempt to con- 
trol the external crisis and to avoid the collapse of the coffee 
economy; government leaders hoped that the crisis would pass 
soon and that another export boom would occur. However, 
with the magnitude and duration of the crisis it became clear 
that Brazil could no longer rely solely on exports of primary 
goods (see Glossary) and that it was necessary to promote eco- 
nomic diversification. During the Estado Novo, the govern- 
ment made initial attempts at economic planning, and in the 
late 1930s began to establish the first large government enter- 
prise, an integrated steel mill. 

The World War II period saw mixed achievements. By the 
late 1930s, coffee production capacity had been reduced drasti- 
cally, the worst of the external crisis had passed, and the Brazil- 



167 



Brazil: A Country Study 

ian economy was ready to grow. However, the war interfered 
with development efforts. Output increased mainly through 
better utilization of the existing capacity but, except for the 
steel mill, there was little industrial and infrastructure invest- 
ment. Thus, at the end of the war Brazil's industrial capacity 
was obsolete and the transportation infrastructure was inade- 
quate and badly deteriorated. 

Import-Substitution Industrialization, 1945-64 

A review of the evolution and structural changes of the 
industrial sector since the end of World War II reveals four 
broad periods. The postwar period to 1962 was a phase of 
intense import substitution, especially of consumer goods, with 
basic industries growing at significant but lower rates. The 1968 
to 1973 period was one of very rapid industrial expansion and 
modernization (between 1962 and 1967, the industrial sector 
stagnated as a result of adverse macroeconomic conditions). 
The 1974 to 1985 phase was highlighted by import substitution 
of basic inputs and capital goods and by the expansion of man- 
ufactured goods exports. The period since 1987 has been a 
time of considerable difficulties. 

At the end of World War II, political and economic liberal- 
ism were reintroduced in Brazil. Getulio Dorneles Vargas (pres- 
ident, 1930-45, 1951-54) was overthrown, democratic rule was 
reestablished, and the foreign-exchange reserves accumulated 
during the war made possible a reduction of trade restrictions. 
However, trade liberalization was short-lived. The overvalued 
foreign-exchange rate, established in 1945, remained fixed 
until 1953. This, combined with persistent inflation and a 
repressed demand, meant sharp increases in imports and a 
sluggish performance of exports, which soon led again to a bal- 
ance of payments (see Glossary) crisis. 

Pessimistic about the future of Brazil's exports, the govern- 
ment feared that the crisis would have a negative impact on 
inflation. Consequently, instead of devaluing the cruzeiro (for 
value of cruzeiro — see Glossary), it decided to deal with the cri- 
sis through exchange controls. In 1951 the newly elected gov- 
ernment of Getulio Vargas enforced a recently established 
system of import licensing, giving priority to imports of essen- 
tial goods and inputs (fuels and machinery) and discouraging 
imports of consumer goods. These policies had the unantici- 
pated effect of providing protection to the consumer goods 
industry. Early in the 1950s, however, convinced that the only 



168 



A welder helps to construct a 
plant to produce 
petrochemicals from natural 
gas at the US$2.5 billion 
petrochemical complex at 
Camacari, sixty kilometers 
north of Salvador, Bahia 
State. 

Courtesy Inter-American 
Development Bank, 
Washington 



hope for rapid growth was to change the structure of the Bra- 
zilian economy, the government adopted an explicit policy of 
import-substitution industrialization. An important instrument 
of this policy was the use of foreign-exchange controls to pro- 
tect selected segments of domestic industry and to facilitate the 
importation of equipment and inputs for them. 

However, the move to fixed exchange rates together with 
import licensing drastically curtailed exports, and the balance 
of payments problem became acute. The system became nearly 
unmanageable, and in 1953 a more flexible, multiple- 
exchange-rate system was introduced. Under the latter, imports 
considered essential were brought in at a favored rate; imports 
of goods that could be supplied domestically faced high rates 
and were allotted small portions of the available foreign 
exchange. Similarly, some exports were stimulated with a 
higher exchange rate than those of traditional exports. This 
system continued to be the main instrument for the promotion 
of import-substitution industrialization, but the performance 
of the export sector improved only modestly. 

Between 1957 and 1961, the government made several 
changes in the exchange-control system, most of which were 
attempts at reducing its awkwardness or at improving its perfor- 
mance with the advance of import-substitution industrializa- 



169 



Brazil: A Country Study 



tion. For this same purpose, the government also introduced 
several complementary measures, including enacting the Tariff 
Law of 1957, increasing and solidifying the protection 
extended to domestic industries, and offering strong induce- 
ments to direct foreign investment. 

In the second half of the 1950s, the government enacted a 
series of special programs intended to better orient the indus- 
trialization process, to remove bottlenecks, and to promote ver- 
tical integration (see Glossary) in certain industries. The 
government gave special attention to industries considered 
basic for growth, notably the automotive, cement, steel, alumi- 
num, cellulose, heavy machinery, and chemical industries. 

As a result of import-substitution industrialization, the Bra- 
zilian economy experienced rapid growth and considerable 
diversification. Between 1950 and 1961, the average annual 
rate of growth of the gross domestic product (GDP — see Glos- 
sary) exceeded 7 percent (see table 4, Appendix). Industry was 
the engine of growth. It had an average annual growth rate of 
over 9 percent between 1950 and 1961, compared with 4.5 per- 
cent for agriculture. In addition, the structure of the manufac- 
turing sector experienced considerable change. Traditional 
industries, such as textiles, food products, and clothing, 
declined, while the transport equipment, machinery, electric 
equipment and appliances, and chemical industries expanded. 

However, the strategy also left a legaq^ of problems and dis- 
tortions. The growth it promoted resulted in a substantial 
increase in imports, notably of inputs and machinery, and the 
foreign-exchange policies of the period meant inadequate 
export growth. Moreover, a large influx of foreign capital in 
the 1950s resulted in a large foreign debt. 

Import-substitution industrialization can be assessed accord- 
ing to the contribution to value added by four main industrial 
subsectors: nondurable consumer goods, durable consumer 
goods, intermediate goods, and capital goods. Using data from 
the industrial censuses, the share of these groups in value 
added between 1949 and 1960 shows a considerable decline in 
the share of the nondurable goods industries, from nearly 60 
percent to less than 43 percent, and a sharp increase in that of 
durable goods, from nearly 6 percent to more than 18 percent. 
The intermediate and capital goods groups experienced mod- 
erate increases, from 32 to 36 percent and from 2.2 to 3.2 per- 
cent, respectively. 



170 



The Economy 



A representative component of the nondurable group is the 
textile industry, the leading sector before World War II. 
Between 1949 and 1960, its share in the value added by indus- 
try as a whole experienced a sharp decline, from 20.1 percent 
to 11.6 percent. In the durable goods group, the component 
with the most significant change was the transport equipment 
sector (automobiles and trucks), which increased from 2.3 per- 
cent to 10.5 percent. 

The lower increases in the shares of the intermediate and 
capital goods industries reflect the lesser priority attributed to 
them by the import-substitution industrialization strategy. In 
the early 1960s, Brazil already had a fairly diversified industrial 
structure, but one in which vertical integration was only begin- 
ning. Thus, instead of alleviating the balance of payments 
problems, import substitution increased them dramatically. 

Stagnation and Spectacular Growth, 1962-80 

Stagnation, 1962-67 

As a result of the problems associated with import-substitu- 
tion industrialization and the reforms introduced by the mili- 
tary regime after March 1964, the Brazilian economy lost much 
of its dynamism between 1962 and 1967. The average rate of 
growth of GDP in the period declined to 4.0 percent and that 
of industry to 3.9 percent. In part, stagnation resulted from dis- 
tortions caused by the strategy. Moreover, political troubles 
negatively affected expectations and precluded the formation 
of a coalition to back the introduction of tough measures to 
control inflation and the balance of payments crisis. Political 
troubles also hindered the removal of obstacles to growth. 

The 1964 coup dealt with the political obstacles by forcefully 
restraining opposition to the military agenda of change. With 
the objective of transforming Brazil into a modern capitalist 
economy and a military power, the regime implemented a 
series of reforms aimed at reducing inflation, at removing 
some of the distortions of import-substitution industrialization, 
and at modernizing capital markets. The regime gradually 
introduced incentives to direct investment, domestic and for- 
eign, and tackled balance of payments problems by reforming 
and simplifying the foreign-exchange system. In addition, the 
regime introduced a mechanism of periodic devaluations of 
the cruzeiro, taking into account inflation. Finally, the military 
government adopted measures to attract foreign capital and to 



171 



Brazil: A Country Study 

promote exports. It took steps to expand public investment to 
improve the country's infrastructure and later to develop state- 
owned basic industries. 

Spectacular Growth, 1968-73 

The post-1964 reforms and other policies of the military gov- 
ernment, together with the state of the world economy, created 
conditions for very rapid growth between 1968 and 1973. In 
that period, the average annual rate of growth of GDP jumped 
to 11.1 percent, led by industry with a 13.1 percent average. 
Within industry, the leading sectors were consumer durables 
(see Glossary), transportation equipment, and basic industries, 
such as steel, cement, and electricity generation. 

As a result of the post-1964 policies, external trade 
expanded substantially faster than the economy as a whole. 
There was a significant growth in exports, especially manufac- 
tured goods, but also commodities. Yet, imports grew consider- 
ably faster, rapidly increasing the trade deficit. This did not 
present a problem, however, because massive inflows of capital 
resulted in balance of payments surpluses. 

The external sector contributed substantially to high growth 
rates, as did the rapid expansion of investment, including a 
growing share of public investment and investment by state- 
controlled enterprises. In addition, increased demand for auto- 
mobiles, durable and luxury goods, and housing resulted from 
a rapid growth in income for the upper income strata and from 
credit plans created for consumers and homebuyers by the cap- 
ital-market reforms. 

The industrial sector generally experienced not only rapid 
growth but also considerable modernization. As a result, 
imports of capital goods and basic and semiprocessed inputs 
increased sharply. The share of intermediate goods imports in 
total imports increased from 31.0 percent in the 1960-62 
period to 42.7 percent in 1972, and that of capital goods, from 
29.0 to 42.2 percent. The total value of imports rose from 
US$1.3 billion to US$4.4 billion. 

A comparison of the 1960 and the 1975 shares of the various 
industrial sectors in total value added by industry reveals a con- 
tinuation in the relative decline of nondurable industries, nota- 
bly textiles, food products, and beverages, and an increase in 
machinery, from 3.2 to 10.3 percent. The relative shares of 
most of the remaining industries, however, did not change sig- 
nificantly in the period. 



172 



The Economy 



As a result of the period's outward-looking development 
strategy, Brazil's industrial exports increased from US$1.4 bil- 
lion in 1963 to US$6.2 billion in 1973. The composition of 
exports shows that whereas in 1963 processed and semipro- 
cessed manufactured exports accounted for only 5 percent of 
total exports, in 1974 their share had reached 29 percent. 

In the 1968-73 period, personal income became more con- 
centrated and regional disparities became greater. Industrial 
expansion took place more vigorously in the Center-South 
Region, which had benefited most from the import-substitu- 
tion industrialization strategy. Its per capita income consider- 
ably exceeded the national average, its infrastructure was more 
developed, and it had an adequate supply of skilled workers 
and professionals. The region was therefore able to take advan- 
tage of the opportunities and incentives offered by the military 
regime. Although a special regional development strategy 
existed for the Northeast, it promoted a distorted industrializa- 
tion that benefited only a few of that region's large cities; the 
Northeast's linkages with the Center-South were stronger than 
its linkages within the region. The combination of a harsh cli- 
mate, a highly concentrated land-tenure system, and an elite 
that consistently resisted meaningful change prevented the 
Northeast from developing effectively. 

Growth with Debt, 1974-80 

Brazil suffered drastic reductions in its terms of trade as a 
result of the 1973 oil shock. In the early 1970s, the perfor- 
mance of the export sector was undermined by an overvalued 
currency. With the trade balance under pressure, the oil shock 
led to a sharply higher import bill. Under such circumstances, 
a prudent course of action would have been to devalue the 
cruzeiro and to adopt growth-reducing policies in order to con- 
tain imports. However, Brazil opted to continue a high-growth 
policy. Furthermore, it adopted renewed strategies of import- 
substitution industrialization and of economic diversification. 
In the mid-1970s, the regime began implementing a develop- 
ment plan aimed at increasing self-sufficiency in many sectors 
and creating new comparative advantages (see Glossary). Its 
main components were to promote import substitution of basic 
industrial inputs (steel, aluminum, fertilizers, petrochemicals), 
to make large investments in the expansion of the economic 
infrastructure, and to promote exports. 



173 



Brazil: A Country Study 

This strategy was effective in promoting growth, but it also 
raised Brazil's import requirements markedly, increasing the 
already large current-account deficit. The current account (see 
Glossary) was financed by running up the foreign debt. The 
expectation was that the combined effects of import-substitu- 
tion industrialization and export expansion eventually would 
bring about growing trade surpluses, allowing the service and 
repayment of the foreign debt. 

Thus, despite the world recession resulting from other coun- 
tries' adjustments to the oil shock, Brazil was able to maintain a 
high growth rate. Between 1974 and 1980, the average annual 
rate of growth of real GDP reached 6.9 percent and that of 
industry, 7.2 percent. However, the current-account deficit 
increased from US$1.7 billion in 1973 to US$12.8 billion in 
1980 (see table 5, Appendix). The foreign debt rose from 
US$6.4 billion in 1963 to nearly US$54 billion in 1980. 

Brazil was able to raise its foreign debt because, at the time, 
the international financial system was awash in petrodollars 
and was eagerly offering low-interest loans. By the end of the 
1970s, however, the foreign debt had reached high levels. Addi- 
tionally, the marked increase of international interest rates 
raised the debt service (see Glossary), forcing the country to 
borrow more only to meet interest payments (see table 6, 
Appendix). Productive capacity, exports, and the substitution 
of imports in various sectors expanded and became more diver- 
sified. However, the expected impacts on Brazil's current 
account were not to materialize until the mid-1980s. 

Another feature of the 1974—80 period was an acceleration 
of inflation. Between 1968 and 1974, the rate of inflation had 
declined steadily, but afterward the trend was reversed. From 
16.2 percent a year in 1973, the growth rate of the general 
price index (GPI — see Glossary) increased to 110.2 percent a 
year by 1980. 

Stagnation, Inflation, and Crisis, 1981-94 

The effect of the 1974-85 period's industrialization on the 
balance of trade was significant. The balance of trade moved 
from an average deficit of US$3.4 billion in the 1974-76 period 
to an average surplus of US$10.7 billion in the 1983-85 period. 
In 1985 the share of manufactures (processed and semipro- 
cessed) of total exports reached 66 percent, and between 
1971-75 and 1978-83 the share of basic input imports in total 
imports declined from 32.3 percent to 19.2 percent. The reces- 



174 




Loading soy beans and coffee onto a freighter for export, 

Paranagud State 

Courtesy Inter-American Development Bank, Washington 

sion and stagnation of the early 1980s had a role in reducing 
imports. However, import substitution was also important, as 
demonstrated by the few years of the 1980s that experienced a 
significant growth in GDP while the trade surplus was main- 
tained. 

Between 1981 and 1992, the GDP increased at an average 
annual rate of only 1.4 percent and per capita income declined 
6 percent. Gross investment, as a proportion of GDP, fell from 
21 to 16 percent, in part as a result of the fiscal crisis and the 
loss of public-sector investment capacity. The decline also 
reflected growing uncertainties regarding the future of the 
economy. The 1980s became known as the "lost decade," and 
its problems spilled over into the 1990s. Despite the stagnation 
of the 1981-92 period, inflation remained a major problem. It 
sometimes reached very high rates, prompting the implemen- 
tation of short-lived shock-stabilization programs. 

The 1981-84 Period 

In 1979 a second oil shock nearly doubled the price of 
imported oil to Brazil and lowered the terms of trade further. 



175 



Brazil: A Country Study 

The rise in world interest rates increased sharply Brazil's bal- 
ance of payments problem and the size of the foreign debt. 
Nevertheless, the government continued borrowing, mainly to 
face an increasing debt burden, while it tried vainly to maintain 
the high-growth strategy. At the beginning of the 1980s, how- 
ever, the foreign-debt problem became acute, leading to the 
introduction of a program to generate growing trade surpluses 
in order to service the foreign debt. The program was achieved 
by reducing growth and, with it, imports, and by expanding 
exports. As a result, in 1981 real GDP declined by 4.4 percent. 
The 1982 Mexican debt crisis ended Brazil's access to interna- 
tional financial markets, increasing the pressure for economic 
adjustment. 

The austerity program imposed by the International Mone- 
tary Fund (IMF — see Glossary) in late 1979 continued until 
1984, but substantial trade surpluses were obtained only from 
1983 on, largely as a delayed result of the import-substitution 
industrialization programs of the 1970s and the reduction in 
imports brought about by economic decline. The austerity pro- 
gram enabled Brazil to meet interest payments on the debt, but 
at the price of economic decline and increasing inflation. 

Inflation accelerated as a result of a combination of factors: 
the exchange-rate devaluations of the austerity program, a 
growing public deficit, and an increasing indexation (see Glos- 
sary) of financial balances, wages, and other values for infla- 
tion. The first two factors are classical causes of inflation; the 
last became an important mechanism for propagating inflation 
and in preventing the usual instruments of inflation control 
from operating. 

By the mid-1980s, domestic debt nearly displaced foreign 
debt as Brazil's main economic problem. During the high- 
growth 1970s, a significant portion of foreign borrowing had 
been by state enterprises, which were the main actors in the 
import-substitution industrialization strategy. Initially, they bor- 
rowed to finance their investments. However, toward the end of 
the decade, with the acute shortage of foreign exchange, the 
government forced state enterprises to borrow unnecessarily, 
increasing their indebtedness markedly. Their situation wors- 
ened with the sharp rise in international interest rates in the 
late 1970s, the devaluations of the austerity program, and the 
decreasing real prices of goods and services provided by the 
public enterprises stemming from price controls. Because the 
state enterprises were not allowed to go bankrupt, their debt 



176 



The Economy 



burden was transferred gradually to the government, further 
increasing the public debt. This, and a growing disorganization 
of the public sector, transformed the public debt into a major 
economic problem. By the mid-1980s, the financial burden 
stemming from the debt was contributing decisively to its rapid 
expansion. 

The 1985-89 Period 

During the second half of the 1980s, it became increasingly 
clear that a large-scale fiscal reform, one that enabled noninfla- 
tionary financing of the public sector, was needed not only to 
control inflation but also to restore the public sector's capacity 
to invest. Both were essential for an economic recovery. How- 
ever, political obstacles prevented the reform from materializ- 
ing. And, because inflation had become the most visible 
symptom of the public-sector disequilibrium, there were sev- 
eral attempts to bring inflation under control through what 
came to be known as "heterodox economic shocks." The 
period saw three such shocks: the Cruzado Plan (1986), the 
Bresser Plan (1987), and the Summer Plan (1989). 

The objective of the Cruzado Plan was to eliminate inflation 
with a dramatic blow. Between 1980 and 1985, the rise in the 
GPI had escalated from 86.3 percent to 248.5 percent annually. 
Early in 1986, the situation became desperate, prodding the 
implementation of the plan. Its main measures were a general 
price freeze, a wage readjustment and freeze, readjustment and 
freeze on rents and mortgage payments, a ban on indexation, 
and a freeze on the exchange rate. 

The plan's immediate results were spectacular: the monthly 
rate of inflation fell close to zero, economic growth surged 
upward, and the foreign accounts remained under control. 
However, by the end of 1986 the plan was in trouble. The wage 
adjustments were too large, increasing aggregate demand 
excessively and creating inflationary pressures. Moreover, the 
price freeze was maintained for too long, creating distortions 
and leading to shortages of a growing number of products. The 
plan could have been rescued if adjustments had been made at 
crucial moments. Instead, inflation accelerated again, and 
there was a return of indexation. 

The two other stabilization plans amounted to renewed 
attempts at bringing inflation down from very high levels. It 
was soon clear that without a thorough reform of the public 
sector, controlling inflation would be impossible. Both plans 



177 



Brazil: A Country Study 



introduced a price freeze and eliminated indexation, but there 
were differences between them, and with the Cruzado Plan. 
Neither was able to address the public-sector disequilibrium 
effectively. The objective of the Summer Plan, for instance, was 
mainly to avoid hyperinflation in an election year. 

In fact, the public-sector disequilibrium became virtually 
locked in as a result of the 1988 constitution, which created 
advantages for various segments of society without indicating 
how these advantages would be paid for. Moreover, it trans- 
ferred large portions of the tax revenues from the federal gov- 
ernment to state and municipal governments, without 
requiring them to provide additional public services. With less 
revenue and more responsibility, the federal accounts experi- 
enced growing deficits. In addition, several subsidies were 
locked into the legislation. These factors and the financial bur- 
den of the public debt meant growing problems of public 
finance. 

The 1980s ended with high and accelerating inflation and a 
stagnant economy, which never recovered after the demise of 
the Cruzado Plan. The public debt was enormous, and the gov- 
ernment was required to pay very high interest rates to per- 
suade the public to continue to buy government debt 
instruments (see also Trade Policies, this ch.). 

The 1990-94 Period 

The first post-military-regime president elected by popular 
suffrage, Fernando Collor de Mello (1990-92), was sworn into 
office in March 1990. Facing imminent hyperinflation and a 
virtually bankrupt public sector, the new administration intro- 
duced a stabilization plan, together with a set of reforms, 
aimed at removing restrictions on free enterprise, increasing 
competition, privatizing public enterprises, and boosting pro- 
ductivity. 

Heralded as a definitive blow to inflation, the stabilization 
plan was drastic. It imposed an eighteen-month freeze on all 
but a small portion of the private sector's financial assets, froze 
prices, and again abolished indexation. The new administra- 
tion also introduced provisional taxes to deal with the fiscal cri- 
sis, and took steps to reform the public sector by closing several 
public agencies and dismissing public servants. These mea- 
sures were expected not only to swiftly reduce inflation but also 
to lower inflationary expectations. 



178 



The Economy 



However, few of the new administration's programs suc- 
ceeded. Major difficulties with the stabilization and reform 
programs were caused in part by the superficial nature of many 
of the administration's actions and by its inability to secure 
political support. Moreover, the stabilization plan failed 
because of management errors coupled with defensive actions 
by segments of society that would be most directly hurt by the 
plan. 

After falling more than 80 percent in March 1990, the GPI's 
monthly rate of growth began increasing again. The best that 
could be achieved was to stabilize the GPI at a high and slowly 
rising level. In January 1991, it rose by 19.9 percent, reaching 
32 percent a month by July 1993. Simultaneously, political 
instability increased sharply, with negative impacts on the econ- 
omy. The real GDP declined 4.0 percent in 1990, increased 
only 1.1 percent in 1991, and again declined 0.9 percent in 
1992 (see table 7, Appendix). 

President Collor de Mello was impeached in September 
1992 on charges of corruption. Vice President Itamar Franco 
was sworn in as president (1992-94), but he had to grapple to 
form a stable cabinet and to gather political support. The weak- 
ness of the interim administration prevented it from tackling 
inflation effectively. In 1993 the economy grew again, but with 
inflation rates higher than 30 percent a month, the chances of 
a durable recovery appeared to be very slim. At the end of the 
year, it was widely acknowledged that without serious fiscal 
reform, inflation would remain high and the economy would 
not sustain growth. This acknowledgment and the pressure of 
rapidly accelerating inflation finally jolted the government into 
action. The president appointed a determined minister of 
finance, Fernando Henrique Cardoso, and a high-level team 
was put in place to develop a new stabilization plan. Imple- 
mented early in 1994, the plan met little public resistance 
because it was discussed widely and it avoided price freezes. 

The stabilization program had three stages: the introduction 
of an equilibrium budget mandated by the National Congress 
(Congresso Nacional; hereafter, Congress); a process of gen- 
eral indexation (prices, wages, taxes, contracts, and financial 
assets); and the introduction of a new currency, the real (for 
value of the real (R$) — see Glossary), pegged to the dollar. The 
legally enforced balanced budget would remove expectations 
regarding inflationary behavior by the public sector. By allow- 
ing a realignment of relative prices, general indexation would 



179 



Brazil: A Country Study 

pave the way for monetary reform. Once this realignment was 
achieved, the new currency would be introduced, accompa- 
nied by appropriate policies (especially the control of expendi- 
tures through high interest rates and the liberalization of trade 
to increase competition and thus prevent speculative behav- 
ior). 

By the end of the first quarter of 1994, the second stage of 
the stabilization plan was being implemented. Economists of 
different schools of thought considered the plan sound and 
technically consistent. 

The Labor Force and Income Levels 

Substantial growth and structural transformations raised 
Brazil's per capita income from the low-income range in the 
late 1950s to the upper middle-income range in 1980. Despite 
the economic problems of the 1980s, per capita income 
remained in the upper middle-income range. Structural 
change had an important effect on employment and earnings 
and on income distribution and poverty. 

Employment and Earnings 

Employment 

Since World War II, the level of employment in Brazil has 
coincided generally with the expansion of the country's labor 
force. However, there have been considerable changes in the 
occupational structure (see fig. 7). The period from 1950 to 
1970 witnessed slow growth in agricultural employment and a 
rapid increase in typically urban occupations, notably com- 
merce and services but also industry (manufacturing, construc- 
tion, and mining). The period from 1970 to 1980 was one of 
very rapid growth in employment, led by industry, resulting 
from a decade of marked economic expansion. The period 
between 1980 and 1990 saw an expansion of employment, led 
by segments of the services sector, despite the sluggish econ- 
omy. 

In the 1950-70 phase, the employed population went from 
17.1 million people to 29.6 million, increasing at a 2.7 percent 
annual rate, similar to the rate of population growth. This 
expansion was led by the services sector, with 4.6 percent 
annual growth. Industrial employment also expanded signifi- 
cantly, with 3.9 percent annual growth. However, industrial 
labor expansion was quite a bit slower than the sector's growth 



180 



The Economy 



in real product in the period (7.9 percent annually). In turn, 
employment in the primary sector experienced only a small 
increase of 1.3 percent annually, much less than the sector's 
growth in real product in the period (4.5 percent annually). In 
the 1950s and 1960s, the output elasticity (see Glossary) of 
employment was very small, not only for agriculture but also 
for industry, the economy's dynamic sector. 

The share of agriculture in total employment fell from 
almost 60 percent in 1950 to 44.3 percent in 1970, that of the 
industrial sector increased from 14.2 percent to 17.9 percent, 
and that of the services sector increased from 25.9 percent to 
37.8 percent. Another change in the period was the increase in 
the number of women in the labor force, from 13.6 to 18.5 per- 
cent. The male participation rate declined from 80.8 to 71.8 
percent. 

The 1970-80 period saw very rapid economic expansion. In 
the 1970s, GDP grew 8.7 percent annually; industry, 9.5 per- 
cent; and agriculture, 4.4 percent. In the same period, the 
employed population increased 3.9 percent annually, from 
29.6 million to 43.9 million persons. This time, the expansion 
in total employment was led by industry, with a 6.7 percent 
annual growth rate. The services sector's labor force grew 5.9 
percent annually. As a result of conservative modernization, 
agriculture's labor force experienced a small reduction, from 
13.3 million persons in 1970 to 13.0 million in 1980. 

By 1980 the share of agricultural employment had fallen to 
30.1 percent, that of industry had increased to 23.9 percent, 
and that of the services sector, to 46.0 percent. The number of 
women in the labor force continued to increase, from 18.5 per- 
cent in 1970 to 27.4 percent in 1980; the male participation 
rate changed little, from 71.8 to 72.4 percent. 

During the 1980-90 period, total employment increased, 
despite the sluggish economy. Between 1981 and 1990, the 
average rate of GDP growth was only 1.6 percent annually; 
industry averaged only 0.5 percent annual growth; agriculture, 
2.6 percent; and the services sector, 2.7 percent. Total employ- 
ment, however, increased 2.8 percent annually, from 43.9 mil- 
lion to 62.1 million persons. The average rate of 
unemployment in the period jumped from around 4 percent 
in the still prosperous years of 1979 and 1980 to more than 6 
percent (average for the nine major metropolitan regions) in 
the depressed 1981-84 period; thereafter, it declined, falling to 



181 



Brazil: A Country Study 



1994 LABOR FORCE = 66.9 MILLION 

(employees 10 years of age or more) 




Source: Based on information from Economist Intelligence Unit, Country Profile: Brazil, 
1994-95 [London], 1995, 22, citing International Labour Organisation, 

Yearbook of Labour Statistics. 

Figure 7. Employment by Sector, 1994 

3.6 percent in 1986. However, even with the return of stagna- 
tion, open unemployment increased only slightly. 

Despite a decline of 4.0 percent in GDP, the unemployment 
rate was only 4.3 percent in 1990, as opposed to 7.9 percent in 
1981. Meanwhile, an extensive informal economy (see Glos- 
sary) expanded, acting as a cushion and absorbing a growing 
number of people that the formal sector failed to employ. The 
informal sector included not only large numbers of street ven- 
dors, peddlers, and providers of petty services but also large 
numbers of middle-class workers as artisans, self-employed 
agents, and backyard business operators. Moreover, established 
businesses used the informal sector as a means of avoiding 



182 



The Economy 



taxes, increased regulations, and the costs associated with 
being registered as employed. 

Brazil lacks precise data on informal-sector employment, but 
there are indications of its expansion since 1980. For instance, 
between 1980 and 1990 the share of employees in the total 
employed urban labor force fell from 78.7 percent to 74.6 per- 
cent, and the share of the self-employed (many in the informal 
sector) rose from 17.2 percent to 19.1 percent. Furthermore, 
the proportion of workers with formal labor contracts declined 
considerably in most urban economic segments. This was cer- 
tainly true in areas where the informal sector traditionally has 
prevailed, such as personal services, entertainment, construc- 
tion, and commerce; but, it was also true in the more orga- 
nized sectors, such as manufacturing. 

In the 1990-92 period, the economy deteriorated further, 
with a 1.3 percent annual decline in GDP and 4.1 percent 
decline in industrial output. Agriculture grew only 1.5 percent, 
and the services sector, only 0.4 percent annually. The overall 
unemployment rate increased from 3.4 percent in 1989 to 4.3 
percent in 1990, 4.2 percent in 1991, and 5.8 percent in 1992. 
The labor absorption by the informal sector continued to be 
large and highly visible. 

In 1992 the share of agriculture in the country's employed 
labor was 9.4 percent and that of industry, 16.0 percent. As a 
result of the swollen informal sector, employment in the ser- 
vices sector increased to 57.4 percent. The female participation 
rate continued to increase, from 27.4 percent in 1980 to 38.9 
percent in 1990. In 1990 women made up 35.5 percent of the 
labor force compared with 15 percent in 1950. The male partic- 
ipation rate increased from 72.4 to 75.3 percent between 1980 
and 1990. 

Earnings 

There are two constants regarding earnings in Brazil since 
World War II: the very low wages of unskilled labor and the 
wide disparity in the wage scale. An indication of the low wage 
levels for unskilled labor is the minimum wage. In 1961 the 
monthly minimum wage averaged only US$113.30 (in 1986 
dollars). The index of the average real minimum wage exhibits 
a clear downward trend (see table 8, Appendix). The 1991 real 
average monthly minimum wage was less than one-third of the 
already low 1961 minimum wage. 



183 



Brazil: A Country Study 

It is interesting to observe the impact of recession and par- 
ticularly inflation on the real minimum wage. The two periods 
of swift decline in the real minimum wage were characterized 
by recession and by a rapidly accelerating inflation. This was 
true in the 1961-65 period and especially so between 1982 and 
1991. The prosperity and comparatively low inflation of the 
1970s (notably during the first half of the decade) did not 
bring about a stronger recovery of the real value of the mini- 
mum wage only because of the repressive wage policy adopted 
by the military regime. 

The 1990 household survey revealed that 30.8 percent 
(some 19.9 million persons) of the employed population 
earned one minimum wage or less. Even allowing for underes- 
timations of earnings by the household surveys, the numbers 
living with very low wages in Brazil are indeed large. 

Organized labor, which has substantially larger average earn- 
ings, has obtained considerable gains since the late 1970s. 
These gains are reflected in the index of average real wage in 
Sao Paulo, the core of the country's modern industrial sector. 
The index evolved from a level of 100 in 1978 to 125.1 in 1982, 
declined to 112.9 in 1983, but jumped to 175.9 in prosperous 
1986. After this it decreased somewhat, reaching 165.9 in 1990 
and 158.4 in 1992. 

As for the disparity in the wage scale, according to the 1990 
household survey, in September of that year 10.8 percent of 
the employed work force, or 6.5 million persons, earned one- 
half of a minimum wage, a monthly average of US$299; 49.2 
percent of the employed work force, or 29.8 million persons, 
received two minimum wages or less. At the other extreme, 7.8 
percent of the employed work force received more than ten 
minimum wages, a monthly average of US$1,941; 3.2 percent, 
or 1.9 million persons, earned more than twenty minimum 
wages, or a monthly average of US$4,000. In that year, more 
than 60 percent of the employed labor force earned less than 
the average monthly earnings of US$211. 

Moreover, data on the distribution of monthly earnings 
reveal that the distributive disparity has increased over time. In 
1960 the poorest 10 percent of the employed labor force with 
earnings received 1.9 percent of the total earnings, but in 1990 
their share was only 0.8 percent. At the other extreme, the rich- 
est 10 percent increased their share of total earnings from 39.6 
percent in 1960 to 44.1 percent in 1990. 



184 



The Economy 



Inequality and Poverty 

Income inequality in Brazil has a personal and a regional 
dimension. The highly concentrated distribution of income 
worsened in the 1960 to 1990 period. The Gini coefficient (see 
Glossary) for the country as a whole increased from 0.50 in 
1960 to 0.56 in 1970, 0.59 in 1980, and 0.63 in 1990. The 1990 
coefficient means that the richest 5 percent of the population 
received 36.6 percent of the national income, while the poorest 
40 percent received only 7.2 percent. Moreover, the pattern of 
income distribution was similar in all of Brazil's five regions. In 
1988 the South had the lowest Gini coefficient (0.58) and the 
Northeast had the highest (0.64). The difference is not 
remarkable; inequality is pervasive. 

A substantial number of Brazilians are poor because Brazil 
has a large population, a medium-range income per capita (as 
compared with the United States, which is in the high range), 
and a high level of inequality. Estimates indicate that in 1990 
almost a third of Brazil's total population, or 39.1 million per- 
sons, were poor. Approximately half of these poor lived in rural 
areas and half in urban areas. In relative terms, however, the 
proportion of the urban poor (22.5 percent) was substantially 
lower than that of the rural poor (50.1 percent). The rural to 
urban migration since 1950 markedly reduced the rural popu- 
lation, but it did not improve the lot of those who remained 
behind. 

As for regional inequality, in 1991 the more developed 
Southeast and South regions, which occupy 17.6 percent of 
Brazil's total territory, had 58.7 percent of the total population 
and generated 74.3 percent of the country's GDP (in 1985). By 
contrast, the poverty-stricken Northeast, which occupies 18.3 
percent of the total area, had 28.5 percent of the total popula- 
tion and generated only 13.1 percent of Brazil's 1985 GDP. The 
huge North (Norte) and Center-West (Centro-Oeste) regions, 
which occupy 64.1 percent of Brazil's total area, had 12.8 per- 
cent of the total population and generated 12.6 percent of Bra- 
zil's 1985 GDP. The Southeast had the largest urbanization rate 
(88.3 percent in 1991); the Northeast had the second largest 
proportion of the population in rural areas (41.6 percent in 
1991), slightly below that of the frontier North (43.9 percent). 

As a result of the economic boom, Brazil's per capita income 
experienced a marked increase in the 1970s, from US$1,253 to 
US$2,266; in the stagnant 1980s, it declined, reaching 
US$2,154 in 1990. In 1970 the per capita income of the South- 



185 



Brazil: A Country Study 

east exceeded the national average by 53.2 percent, while that 
of the Northeast was 44.4 percent lower. This discrepancy has 
declined, but only marginally: in 1988 the per capita income of 
the Southeast was 43.6 percent higher than the national aver- 
age, and that of the Northeast was 37.5 percent lower. Of Bra- 
zil's 39.1 million poor in 1990, 53.1 percent were in the 
Northeast and 25.4 percent were in the prosperous Southeast. 
In the Northeast, the majority of the poor lived in rural areas, 
while in the Southeast the largest portion of the poor lived in 
cities. 

Brazil's major urban areas warrant examination, given the 
large and growing number of urban poor. In 1991 nine Metro- 
politan Regions (MRs), including Belem, in the North; For- 
taleza, Recife, and Salvador in the Northeast; Belo Horizonte, 
Rio de Janeiro, and Sao Paulo in the Southeast; and Curitiba 
and Porto Alegre in the South, had a combined population of 
42.7 million people, almost one-third of Brazil's total popula- 
tion. The smallest MR, Belem in the Amazon, had 1.3 million 
inhabitants, and the largest, Sao Paulo, had more than 15 mil- 
lion inhabitants. The three largest MRs were in the Southeast. 
They had a combined population of 28.6 million, nearly 67 
percent of the total metropolitan population and almost 20 
percent of Brazil's total population. The four MRs in the 
North/Northeast had a combined population of 9.0 million — a 
large number for an underdeveloped or frontier area. The 
South's two MRs had a combined population of 5.0 million. 

The metropolitan Gini coefficients for 1970 and 1988 show 
that all the MRs except for Curitiba experienced a deteriora- 
tion in income distribution. The coefficients for 1988 also show 
that the distribution of income was worse in the Northeast MRs 
and better in Sao Paulo and in the two Southern MRs, but the 
differences were not large. 

The metropolitan average household real income shows that 
all MRs, except for Rio de Janeiro, had increases between 1970 
and 1988. In 1970 and in 1988, the average household incomes 
of the North-Northeast MRs were significantly lower than those 
of the Southeast-South. However, the gap between the two 
groups has declined somewhat. In 1970 the average household 
income of Fortaleza (the MR with the lowest average) was only 
36.6 percent of that of Sao Paulo (with the highest average); in 
1988 this average had increased to 53.3 percent. This does not 
mean that the Northeast MRs were prospering. Rather, it 
means that Sao Paulo, flooded with migrants, had a sharp 



186 



The Economy 



increase in the number of households, moderating the rise in 
its average household income. 

Estimates indicate that in 1990 the nine MRs had a com- 
bined total number of poor of almost 12.3 million people, or 
28.9 percent of the total population of the MRs. Sao Paulo and 
Rio de Janeiro had the largest absolute number of poor (over 3 
million, or nearly 24 percent of the total MR poor each), but 
the highest levels of urban poverty were in the MRs of the 
North/Northeast. 

In 1989 the proportion of the poor unemployed was 11 per- 
cent, while that of the rest of the work force was only 3 percent. 
The proportion of the poor employed in informal occupations 
was 38 percent, while that of the remaining population was 26 
percent (still quite a high percentage). And, the proportion of 
poor children, age seven to fourteen, out of school was 14 per- 
cent, while that of the nonpoor was only 6 percent. 

Structure of Production 

The growth and diversification that took place after World 
War II brought considerable changes to the productive struc- 
ture of the Brazilian economy. The share of the agricultural 
sector in GDP declined from 24.3 percent in 1950 to 11 per- 
cent in 1993. In the same 1950 to 1993 period, the share of 
industry increased from 24.1 percent to 29 percent, if this sec- 
tor includes manufacturing, mining, and construction (see fig. 
8). The share of agriculture in total employment dropped from 
62 percent in 1950 to 29.2 percent in 1994, and that of services 
increased from 25 to 43.6 percent. (Taking into account the 
informal economy, the services sector totaled 56 percent of 
GDP in 1993, depending on the source of information.) Yet, 
despite the industrialization that took place, the share of indus- 
try in total employment increased only from 13 to 23.4 percent 
between 1950 and 1994. 

Agriculture 

When examining the behavior of the agricultural sector in 
the postwar years, it is possible to identify two distinct periods: 
horizontal (geographical) expansion from 1949 to 1969 and 
conservative modernization, from 1970 to the present. In the 
immediate postwar years, Brazilian agriculture included an 
export sector that relied heavily on coffee but also on cotton, 
sugar, and a few minor commodities, and a semisubsistence 



187 



Brazil: A Country Study 



FY 1993 - GDP US $785 Billion 



AGRICULTURE, FORESTRY, 




TRADE 7% TRANSPORTATION AND 
COMMUNICATIONS 6% 



NOTE— Data include costs of financial services but do not include indirect taxes. 

Source: Based on information from Fundacao Institute Brasileiro de Geografia e 
Estatfstica, Anudrio estatistico do Brasil 1993, Rio de Janeiro, 1993, Annex 
supplement, table with data for 1993. 

Figure 8. Gross Domestic Product ( GDP) by Sector, 1993 

sector that produced for the domestic market. At the time, the 
country's population, its per capita income, and its urban sec- 
tor did not yet impose a large demand on the agricultural sec- 
tor. With import-substitution industrialization, however, the 
situation changed drastically. This particular industrialization 
strategy required that the agricultural sector generate most of 
the economy's foreign exchange, produce growing outputs of 
food and some industrial inputs, and transfer resources for 
import-substitution industrialization. The transfer mechanism 
was a tax on the foreign exchange earned by coffee exports 
and the persistent implicit taxation of agriculture. The virtual 
exclusion of many agricultural products from the world market 



188 



The Economy 



was caused by the highly overvalued cruzeiro, which resulted 
from this strategy. Consequently, the cheap domestic food pol- 
icy that prevailed depressed prices in favor of the urban-indus- 
trial sector. 

Paradoxically, the overall performance of agriculture during 
the horizontal expansion period was adequate. Agricultural 
GDP increased 4.2 percent a year between 1949 and 1969, a 
considerably higher growth rate than that of the population; 
between 1950 and 1959, food production increased 5.4 percent 
a year, and the production of exportables rose 4.1 percent 
annually. A major factor in this performance was horizontal 
expansion, that is, the incorporation of new land, especially 
along the agricultural frontier, made possible by an aggressive 
policy of road construction (see Frontier Expansion That 
Shaped Brazil, ch. 1). Moreover, the disincentives of the 
import-substitution industrialization policies were circum- 
vented by maintaining ample access to land at concessionary 
terms for the landowning elite and for commercial farmers, 
reproducing a pattern established early in the colonial period. 

By the late 1960s, it was clear that horizontal growth of agri- 
culture was reaching its limits rapidly and that increases in pro- 
ductivity would be essential for a continued expansion of 
production. Moreover, the growth strategy of the military 
regime required a fast expansion of exports, including agricul- 
tural commodities. Thus, the government implemented a con- 
servative modernization strategy consisting of technical change 
for a restricted number of subsectors and incentives for the for- 
mation of agribusiness complexes. 

Technical change involved the development and adaptation 
of green-revolution technologies, geared mainly toward large 
agricultural operations that had important roles for mechani- 
zation and chemical inputs. Regarding the agribusiness com- 
plexes, the government provided strong incentives for the 
creation and expansion of processing industries and for the 
development and modernization of agricultural input indus- 
tries. Moreover, the agricultural phase of the soymeal and oil, 
instant coffee, processed beef, poultry, orange juice, and sugar 
and alcohol agribusiness complexes received subsidized credit, 
guaranteed prices, and tax exemptions and subsidies when 
exported. Traditional, unprocessed, agricultural products, 
however, were subjected to heavy taxation and to price and 
other controls. As in the import-substitution industrialization 
phase, the production of cheap food was required, but only 



189 



Brazil: A Country Study 

recently have government policies begun specifically to address 

this need. 

Products benefiting from agricultural modernization 
responded well to the conservative modernization strategy. 
Their production methods underwent considerable technical 
change, and their production and yields increased markedly. 
Traditional products, however, failed to modernize and tended 
to perform poorly. They had scant access to credit and to the 
price-support policy. Moreover, they were frequently subjected 
to price controls, to a maze of regulations and export restric- 
tions and quotas, and to competition from subsidized imports 
when they failed to supply the domestic market adequately. 

At the beginning of the 1990s, the main crops in the modern 
segment were cocoa, cotton, rice, sugarcane, oranges, corn, 
soybeans, and wheat; those in the traditional segment included 
beans, manioc (cassava), bananas, peanuts, and coffee (see 
table 9, Appendix). Brazil is also one of the largest exporters of 
guavas, lemons, mangoes, passion fruit, tangerines, and 
tobacco. Crop production between 1970 and 1990 shows that 
the components of the modern segment grew considerably, 
both in production and in yield, while those of the traditional 
segment stagnated or declined. The growth in export crops 
allowed Brazil to become one of the world's largest soybean 
producers and to earn needed foreign exchange. It also 
allowed the substitution of sugarcane alcohol for imported oil. 

Livestock 

Brazil's livestock sector went through a similar process of 
selective modernization. Until the early 1970s, it remained 
quite backward; its expansion relied chiefly on the incorpora- 
tion of more land and animals into production. Following the 
expansion of agribusiness complexes, livestock production pro- 
cesses also changed. However, major differences exist between 
the modern and the traditional segments of the beef-cattle, 
poultry, and swine subsectors — the country's main livestock 
subsectors. 

Between 1970 and 1991, Brazil's beef-cattle herd grew at a 
3.1 percent average yearly rate, from 78.5 million to 152.1 mil- 
lion head; the slaughter of beef-cattle increased from 9.6 mil- 
lion to 13.9 million head; and the total carcass weight increased 
from 1.8 million to 2.9 million tons. However, these numbers 
hide large regional differences (see table 11, Appendix). The 
beef-cattle industry in areas near the country's more developed 



190 



The Economy 



core has experienced considerable modernization, interlocked 
with the expansion of a dynamic agribusiness sector, which sup- 
plies the industry with modern inputs and slaughters and pro- 
cesses its animals for domestic and world markets. As a result, 
Brazil's beef exports increased from 98,300 tons of chilled beef 
and 15,800 tons of processed beef in 1970, at a total value of 
US$298.6 million (in 1992 dollars), to 96,800 tons of chilled 
beef and 127,300 tons of processed beef in 1992, at a total value 
of US$618.1 million. A still substantial traditional beef-cattle 
industry can be found in the frontier areas or in the more 
backward parts of Brazil; its productivity remains very low, and 
it is plagued by serious sanitary and management problems. 

The poultry subsector experienced spectacular improve- 
ments from 1970 to 1991, changing from a small, backyard- 
based production into a modern industry. This change is 
reflected in the fact that, while the poultry flock increased 2.8 
times between 1970 and 1990, from 214.3 million to 594.3 mil- 
lion head, the total carcass weight of the fowl slaughtered com- 
mercially increased twenty-one times, from 85,400 to 1.8 
million tons. Moreover, the export of poultry products, which 
in 1970 was negligible, in 1992 amounted to 378,000 tons, rep- 
resenting a total value of US$455.6 million. The transforma- 
tion of the poultry subsector into a modern industry was 
achieved through the development of agribusiness complexes. 
These modern enterprises play a central role; they provide 
farmers with inputs, with genetic material, and with technical 
assistance, in addition to buying the finished poultry from the 
farmers. 

As for pork, the swine herd increased only 33.9 percent 
between 1970 and 1991, from 25.6 million to 34.3 million ani- 
mals. However, a small portion of this subsector experienced 
considerable changes, also induced by agribusiness. Until the 
early 1990s, the Brazilian swine herd was composed over- 
whelmingly of mixed breeds of low-quality, lard-producing ani- 
mals. Moreover, the management of the herd was primitive, 
and poor sanitation was a problem. The growing modern seg- 
ment of the pork industry has a high-quality herd of meat-pro- 
ducing animals. Management practices have improved 
considerably, and there is a similar interaction between farmers 
and commercial and industrial enterprises. 

Fishing 

With the exception of a few specialized subsectors geared to 



191 



Brazil: A Country Study 

the world market, such as lobster fishing, Brazil's fishing indus- 
try has not developed well, despite the fiscal incentives it 
received during the 1970s. Even the specialized subsectors, 
including fish, crustaceans, and mollusks, only increased from 
526,300 tons in 1970 to 798,600 tons in 1989. 

In Brazil fishing is undertaken by businesses employing fairly 
modern equipment, and by thousands of independent fisher- 
men spread along Brazil's immense coastal region. Indepen- 
dent fishermen employ primitive tools and fishing methods, 
producing for self-consumption and for sale in nearby markets. 
With some exceptions, the commercial segment has not 
expanded significantly, and in 1989 the production of fish and 
related catches amounted to a mere 5.3 kilograms per inhabit- 
ant. 

Industry 

After 1987 problems that had confronted industry earlier in 
the decade intensified, adverse macroeconomic conditions 
persisted, and political troubles affected expectations 
adversely. Until the end of the 1980s, industry relied heavily on 
government protection and favors, but it also faced pervasive 
regulations and extensive governmental interference. These 
factors had a deleterious effect on industrial investment and on 
the productivity of several industrial subsectors, increasingly 
blunting the competitive edge they had struggled to achieve in 
the world market. Moreover, as a result of the fiscal crisis, the 
government was hard-pressed to continue to provide support 
and subsidies for industry and to maintain and expand the 
country's infrastructure. 

The Collor de Mello administration, inaugurated in 1990, 
introduced significant changes in Brazil's economic strategy. 
Regarding industry, the government implemented measures to 
eliminate regulations, to liberalize trade, and to markedly 
reduce governmental favors and subsidies. It also announced a 
series of actions aimed at increasing industry's competitiveness. 
Despite these efforts, political and macroeconomic difficulties 
prevented the effective implementation of the new strategy, 
and the mounting fiscal crisis dampened efforts to rebuild and 
improve the badly deteriorated infrastructure. Therefore, an 
important part of the industrial sector failed to recover and to 
modernize. With stagnation, the domestic market could not 
give industry a dynamic push. Moreover, the reduction in 
investment, coupled with the deteriorating infrastructure, led 



192 



The Economy 



to declines in competitiveness. These developments, together 
with fewer import barriers, caused industry's balance of trade 
to decline, from a peak of US$16.3 billion in 1988 to US$11.1 
billion in 1991. In the early 1990s, despite sectoral weaknesses, 
the industrial sector became a major contributor to the coun- 
try's exports and trade surplus. 

Mining 

Since the early colonial period, expectations have loomed 
large about mineral riches hidden in Brazil's vast territory. 
However, the full extent of the country's mineral wealth is still 
unknown. Various efforts have been made to survey the coun- 
try, one of which uncovered the Greater Carajas mineral prov- 
ince in the eastern Amazon (see fig. 9) . Yet, at the beginning of 
the 1990s only 10 percent of the country's subsoil was known in 
sufficient detail. Correspondingly, the share of mining in GDP 
has increased but remains small; in 1950 it was only 0.4 per- 
cent, rising to 0.8 percent in 1970, to 1.0 percent in 1980, and 
to 2.5 percent in 1986, but declining to 1.5 percent in 1990. 

The value of mineral production expanded from US$5.4 bil- 
lion in 1980 to US$13.0 billion in 1990. However, only ten min- 
erals — crude oil, iron, gold, calcium ore, natural gas, bauxite, 
phosphate, granite, cassiterite, and zinc — accounted for 85.5 
percent of this total; crude oil alone accounted for 37.6 per- 
cent of the total, and both iron ore and gold accounted for 
11.4 percent each. Apparently, the exploration of several other 
mineral substances has great potential, but such efforts have 
yet to be realized. 

Advances in the early 1990s included the Greater Carajas 
project, which involves the production and export of iron ore, 
products of the bauxite-aluminum complex, and manganese, 
among other minerals. Overall, exports of mineral products 
expanded substantially, and there was a considerable import 
substitution of mineral inputs. In 1974 the trade balance of the 
mineral sector (primary, semiprocessed, and manufactured 
minerals) was a negative US$2.5 billion, and the deficit 
increased, reaching US$10.7 billion in 1980. However, by 1985 
the deficit had declined to US$0.6 billion and thereafter the 
trade balance showed growing surpluses (US$1.1 billion in 
1988, US$1.3 billion in 1989, and US$1.6 billion in 1990). This 
reversal was caused by an expansion of exports, especially of 
iron ore, products of the bauxite-aluminum complex, and 



193 



Brazil: A Country Study 




"Pacific 
Ocean 


1 CHILE 


Al 


Bauxite 


Au 


Gold 


Be 


Beryllium 


C 


Coal 


Cb 


Columbite 


Cr 


Chromium 


Cu 


Copper, mine output 


Dm 


Diamond 


Fa 


Ferroalloys 


Fe 


Iron ore 


Mn 


Manganese 


Ni 


Nickel 


NG 


Natural gas 


P 


Phosphate 


pet 


Petroleum 


Qtz 


Quartz crystals 


Sn 


Tin 



Boundary representation 
not necessarily authoritative. 



International boundary 
National capital 
Populated place 
Crude petroleum pipeline 
Natural gas pipeline 

Projected natural gas 

pipeline 
fl Refining center 
♦ Tanker terminal 
Q. Hydroelectric power project 
200 400 Kilometers 



200 



400 Miles 



Source: Based on information from Orlando D. Martino, Mineral Industries of Latin 

America, Washington, 1988, 30; "Energy Map of Latin America," Major Pipelines 
of the World [London] , 62, No. 3, March 1995; and "Amazonia: A World 
Resource at Risk," National Geographic Magazine, August 1992. 



Figure 9. Petroleum, Natural Gas, Minerals, and Hydroelectric 
Resources, 1995 

manganese, and to a significant extent by reductions in crude 
oil imports. 

Brazil's mineral policy has been marked strongly by national 
security considerations. Until the early 1990s, foreign capital 



194 



The Economy 



was mostly barred from the more attractive portions of the sec- 
tor. Petroleum has been a state monopoly. Another state enter- 
prise, the giant Rio Doce Valley Company, Inc. (Companhia 
Vale do Rio Doce — CVRD), has a large share of the iron ore 
deposits, and it has played an important role in the develop- 
ment of the bauxite-aluminum complex and of other minerals. 
CVRD is also a major railroad and shipping operator, by far 
Brazil's largest exporter, and its largest generator of foreign 
currency. In late 1994, foreign investment funds held about 10 
percent of CVRD's stock. In 1995 there were still legal obstacles 
to foreign participation in Brazil's mineral sector. 

Energy 

The unfolding of Brazil's current difficulties in the energy 
arena constitutes a classic example of distortions arising from 
misdirected regulation combined with the action of interest 
groups. When import-substitution industrialization began in 
the early 1950s, the country's main sources of energy were fire- 
wood, charcoal, and bagasse (the dry residue from the process- 
ing of sugarcane). Because modern industrial expansion could 
not be based on these, a decision had to be made regarding the 
sources of energy to be used. Not surprisingly, electricity and 
petroleum products received special attention. 

Electric Power 

In 1950 Brazil's capacity to generate electricity was only 1.9 
million kilowatts, and most of the required petroleum products 
had to be imported. An adequate supply of electric energy 
became critical, both for production and for a rapidly growing 
urban population. Petroleum requirements expanded quickly 
because of the decision to make the automobile industry the 
mainstay of import-substitution industrialization and because 
of the heavy reliance on trucks for short- and long-distance 
transportation. Ambitious road-building programs were imple- 
mented, and the domestic automobile industry quickly 
expanded the stock of motor vehicles, reaching 1.05 million 
units in 1960, 3.1 million units in 1970, and 10.8 million units 
in 1980. 

Low electricity prices stemmed from the substitution policy 
and from the attempt to control inflation by restraining the 
increase in public-sector prices in nominal terms. Thus, the 
capacity of the electricity sector to generate resources for 
investment was affected considerably. As a result of federally 



195 



Brazil: A Country Study 

induced borrowing in die late 1970s and early 1980s, the sector 
was also heavily indebted. Intermittent adjustments in electric- 
ity prices allowed the sector to generate profits and thus some 
resources for investment. However, on occasion, the govern- 
ment returned to the practice of manipulating consumer 
prices to contain inflation. 

Although the federal treasury initially assumed many of the 
cost distortions of the energy policy, by the end of the 1980s 
the virtual bankruptcy of the public sector precluded this 
approach. In the early 1990s, the government implemented a 
series of measures to reduce its role. It introduced deregula- 
tion, market reforms, and privatization, but these reforms did 
not change the essence of the energy policy. Interest groups 
prevented the adoption of measures that would drastically alter 
the liquid combustible policy, and the agency controlling elec- 
tric energy continued to lack resources for investments. Thus, 
the energy price structure was altered only marginally. 

Low electricity prices induced a considerable substitution of 
electricity for other sources of energy and the expansion of 
electricity-intensive production, such as aluminum. The heavy 
investments in hydroelectricity of the 1970s and 1980s 
matured, creating a considerable generating capacity (50,500 
million megawatts or 93.3 percent of the total generating 
capacity of electricity in 1993). One of the world's leading pro- 
ducers of hydroelectric power, Brazil has a potential of 106,500 
to 127,868 megawatts, or, according to the World Factbook 1996, 
55,130,000 kilowatts. The country's two largest operating 
hydroelectric power stations are the 12,600-megawatt Itaipu 
Dam, the world's largest dam, on the Rio Parana in the South, 
and the Tucurui Dam in Para, in the North Region (see fig. 3). 

In principle, an increase in the generating capacity for elec- 
tricity should have been easy to achieve. Brazil has enormous 
hydroelectric potential, and investments in the sector were 
forthcoming, although with an initial delay. However, until 
1995 nationalistic considerations excluded foreign capital from 
the electric energy sector, and regulatory obstacles prevented 
domestic private investment. The federal and state govern- 
ments were therefore left with the task of expanding the gener- 
ating capacity. As of the early 1990s, the government continued 
to control the sector's production end, as well as transmission 
and distribution, although privatization of the sector is under 
consideration. 



196 



The Economy 



Petroleum 

The fast-growing requirements of petroleum and petroleum 
by-products were met initially by imports. However, foreign- 
exchange difficulties, coupled with strategic considerations, 
led to efforts to reduce the country's dependence on imports. 
In the early 1950s, the government granted a near monopoly 
of the exploration, production, refining, and transportation of 
oil to the Brazilian Petroleum Corporation (Petroleo Brasileiro 
S.A. — Petrobras), the state-owned oil company, and made 
resources available for investments. Emphasis was placed on 
the expansion of a domestic refining capacity because world oil 
prices were low and no problems were envisaged with oil sup- 
ply. Thus, an important refining sector developed gradually. 

The oil crises of the 1970s placed Brazil in a vulnerable situa- 
tion. In 1974 almost 80 percent of Brazil's total oil consump- 
tion was imported, and the increases in oil prices imposed a 
substantial burden on the country's balance of payments. Con- 
sequently, reducing dependence on imported energy, particu- 
larly petroleum, became the main objective of energy policy. 
This reduction was to be achieved by large investments in 
petroleum substitutes, notably electric energy and ethanol, and 
by a substantial expansion in the exploration and domestic 
production of petroleum. Although modest oil fields were not 
discovered until late in the 1970s, investments in the energy 
sector increased from around 10 percent of total investment in 
the early 1970s to a peak of 23.5 percent in 1982-83. As a pro- 
portion of GDP, investment in energy increased steadily, from 
2.8 percent early in the 1970s, to a peak of 5.0 percent in 1982. 

The government also implemented the energy price policy 
in reaction to the 1979 oil shock. The basic assumption was 
that the price of oil would remain at its high 1979 level. Thus, 
emphasis on promoting substitution was absolute. The prob- 
lem, however, was that this emphasis did not change after oil 
prices began to decline. To encourage substitution, the govern- 
ment set energy prices. The price of gasoline was set at a high 
level, not only to reduce its use but also to finance Petrobras's 
exploration effort and to subsidize other petroleum products. 
The prices of diesel fuel and propane (extensively used for 
cooking) were maintained artificially low, requiring subsidies. 
The low diesel price was intended to keep transportation costs 
from increasing sharply, and social arguments were used to jus- 
tify the propane subsidy. 



197 



Brazil: A Country Study 

To induce the purchase of ethanol-propelled cars, the price 
of ethanol was maintained at 60 percent of that of gasoline. To 
finance this subsidy, a mixture of 20 percent of ethanol in the 
gasoline was established. The high gasoline prices exceeded 
the cost of ethanol, and the profits were used to cover the sub- 
sidy. Specially low prices for electric energy were established to 
encourage the replacement of fuel oil and other oil derivatives 
in production. 

The combination of conservation and substitution, along 
with the expansion of domestic production, reduced the coun- 
try's dependence on imported crude oil, from around 80 per- 
cent in the late 1970s to 45.6 percent in 1990. Domestic output 
of crude oil increased from an average 165,000 barrels a day in 
1975 to some 800,100 barrels a day by 1996. By the end of 1995, 
Brazil's proven reserves had reached 4.8 billion barrels and 
potential reserves were at 8.8 billion barrels. About 64 percent 
of Brazil's domestic oil comes from the continental shelf in the 
Campos Basin, which accounts for 83 percent of proven 
reserves. The country's petroleum reserves may actually reach 
20 billion barrels if as yet unproven discoveries in deep water 
off the Brazilian coast are included. 

Despite these advances, however, the rigidity of the energy 
price policy brought about serious problems. The maintenance 
of the gasoline-ethanol price differential and other induce- 
ments led to a rapid increase in the purchase of ethanol-pro- 
pelled automobiles and to a growing conversion of gasoline 
cars to ethanol. Moreover, the basic assumption that the price 
of oil would remain high was incorrect. Although world oil 
prices declined, the price policy remained in effect for ethanol 
producers, owners of ethanol-propelled cars, and the motor 
vehicle industry. Additionally, the real gasoline price was 
eroded gradually by the government's tendency to fight infla- 
tion by tampering with the prices of goods and services pro- 
duced by the public sector. Also, the substitution of ethanol for 
gasoline caused a swift reduction in the sale of gasoline in the 
domestic market. Consequently, the profits Petrobras obtained 
initially from gasoline dwindled quickly, and the company 
required assistance from the treasury for its exploration pro- 
gram and to cover various subsidies. The sharp increase in the 
use of diesel fuel for transportation, created by this fuel's sub- 
sidy, together with technical rigidities in refining, forced Petro- 
bras to produce much more gasoline than was required by the 
domestic market. This excess had to be sold abroad, often at 



198 




The 6 million-kilowatt Paulo 
Afonso Hydroelectric Project in 
Paulo Afonso, Bahia State 
Courtesy Inter-American 
Development Bank, 
Washington 



Transmission lines carrying 
electricity from the Paulo 
Afonso Hydroelectric Project 
past the town of Agua Verde, 
Ceard State 
Courtesy Inter-American 
Development Bank, 
Washington 




199 



Brazil: A Country Study 

below-cost prices. Because the demand for diesel fuel contin- 
ued to grow and the demand for gasoline to shrink, Petrobras 
was forced to invest heavily in changing the product profile of 
its refineries. In the early 1990s, the government reduced the 
gasoline-ethanol price differential (in 1993 the price of etha- 
nol was 78.4 percent of that of gasoline). The price of gasoline 
was maintained sufficiently high to prevent massive subsidies to 
ethanol. The prices of diesel fuel and propane were increased. 

Natural Gas 

Brazil meets only 2 percent of its energy needs with natural 
gas, but the country's natural gas consumption is likely to 
increase greatly. In May 1992, the state oil companies of Brazil 
and Bolivia signed an agreement outlining the route for a 
2,270-kilometer, US$2 billion pipeline system to deliver natural 
gas from Bolivian fields to Brazil's Southeast. The pipeline was 
scheduled to begin supplying 8 million cubic meters a day of 
Bolivian gas in 1997, building up to 16 million cubic meters a 
day by 2004. 

Nuclear Power 

Nuclear energy provides an interesting chapter in Brazil's 
energy policy. In the early 1970s, nuclear energy was consid- 
ered to have great potential, but it failed to develop. In 1975 
Brazil signed an agreement with the Federal Republic of Ger- 
many (West Germany) under which that country would supply 
eight nuclear power reactors and transfer technology for the 
complete nuclear fuel cycle. A small nuclear power plant — the 
Angra I, which has a 626-megawatt capacity — was built near Rio 
de Janeiro, and work was programmed to start on two larger 
facilities on the same site (the Angra II and III units, which 
were to have a combined capacity of 3.1 million kilowatts). 

The Angra I plant, which has a reactor supplied by Westing- 
house Electric Corporation, was completed and trial runs were 
made in 1982, but reactor defects delayed operations until 
1983. Moreover, technical problems allowed the facility to func- 
tion only intermittently. Regarding the Angra II and III plants, 
construction was started on the first. However, the fiscal crisis, a 
slower than anticipated growth in the demand for electricity in 
the 1980s, the adverse United States reaction to the Brazil-West 
Germany agreement, and a growing environmental militancy 
in Brazil led to slowdowns in construction. 



200 



The Economy 



In 1985 the agreement with West Germany was revised, and 
the construction of the other reactors was postponed indefi- 
nitely, in part for financial reasons. Moreover, growing fiscal 
difficulties led to an interruption of construction on Angra II 
and further postponement of Angra III. In 1988 it was esti- 
mated that the completion of the two plants would require 
US$2.8 billion, which was not available. In the early 1990s, 
there were no indications of when the two facilities would be 
completed. Despite the delays, the technology transfer clauses 
of the agreement have been maintained, and Brazil has contin- 
ued to receive West German nuclear technology. 

In 1990 Brazil's uranium reserves were estimated at 301,500 
tons, or the equivalent of 2.1 billion tons of petroleum. A yel- 
low-cake (see Glossary) factory and a plant to produce nuclear 
fuel elements have been completed, and additional processing 
facilities are under construction or planned. These will allow 
for the enrichment of uranium and the reprocessing of spent 
fuel. However, as was the case with the power reactors, lack of 
resources has slowed down developments in this area. In early 
1997, the Brazilian nuclear energy program was being supplied 
by the only uranium mine operating in Brazil, in Pocos de Cal- 
das, Minas Gerais State. That mine is being deactivated and 
replaced by the Lagoa Real/Caetite Mine in the Caetite District 
in southwestern Bahia State (see Nuclear Programs, ch. 6). 

The Services Sector 

In 1950 Brazil's services sector was still small and, except for 
certain segments associated with international trade, quite 
undeveloped. With industrialization, the sector expanded and 
underwent considerable changes. By the early 1990s, it had 
developed an important modern segment, mainly composed of 
parts of the subsectors of commerce, transportation, communi- 
cations, finance, and professional services. However, other sub- 
sectors, especially education and public administration, failed 
to develop adequately. 

Moreover, an informal economy, a large portion of which 
was in the services sector, expanded as a result of poverty, the 
rapid rise in population, the inadequate provision of educa- 
tion, and the succession of economic troubles since 1980. This 
expansion can be seen by examining the services sector's share 
of GDP and employment over time. Between 1950 and 1980, 
the services sector generated around 50 percent of the coun- 
try's GDP; by 1993 the share had increased to at least 41 per- 



201 



Brazil: A Country Study 

cent but possibly as high as 55.9 percent, in part because of 
industry's poor performance but also because of the informal 
sector's expansion. The share of the services sector in the 
absorption of manpower is also evidence of the recent growth 
of the informal sector. In 1950 the services sector employed 
only 22.5 percent of the total economically active population 
(see Glossary); this proportion rose to 33.3 percent in 1970, to 
40.8 percent in 1980, and, in a sharp rise, to 57.4 percent in 
1992. 

Transportation 

Before the 1930s, roads and railroads primarily linked pro- 
duction centers to seaports, and there were some connections 
among major urban centers. Rail links to the rest of South 
America were never developed in any measure comparable 
with those among European countries, or between the United 
States and Canada. Adequate international road links with 
neighboring countries existed only with Brazil's southern 
neighbors — Argentina, Uruguay, and Paraguay. By the 1980s, a 
start had been made on a national road system connecting the 
various parts of the country. However, construction and main- 
tenance costs were high, slowing extensions to the system as 
well as the addition of feeder roads. In a country as large as 
Brazil, with its difficult terrain, a developed transportation sys- 
tem remains many years off (see fig. 10). 

Highways 

By 1992 Brazil's national highway network totaled 1,670,148 
kilometers. Paved highway totals 161,503 kilometers; 1,508,645 
kilometers are gravel or earth. Paved roads link the capital, 
Brasilia, with every region of Brazil. Roads are the principal 
mode of transport, accounting for 60 percent of freight and 95 
percent of passenger traffic, including long-distance bus ser- 
vice. Major projects include the 5,000-kilometer Trans-Amazo- 
nian Highway, running from Recife and Cabedelo to the 
Peruvian border; the 4,138-kilometer north-south Cuiba-San- 
tarem Highway; and the 3,555-kilometer Trans-Brasiliana 
Project, which will link Maraba, on the Trans-Amazonian High- 
way, with Acegua, on the Uruguayan border. 

Railroads 

Railroads total at least 30,129 kilometers, of which 24,690 
kilometers consist of 1.000-meter gauge, 5,120 kilometers con- 



202 



J 



1 

^ 



The Economy 



sist of 1.600-meter gauge, 310 kilometers consist of mixed 
1.600- to 1.000-meter gauge, 13 kilometers consist of 0.760- 
meter gauge, and 2,150 kilometers are electrified. Rail projects 
from mining areas to ports have accounted for the bulk of 
investment in the railroads since the mid-1980s. Mining compa- 
nies operate several privately owned railroads. In 1987 the gov- 
ernment announced controversial plans to build a 1,600- 
kilometer north-south railroad to link the city of Acailandia, in 
Maranhao State, with Brasilia. The Federal Railroad System, 
Inc. (Rede Ferroviaria Federal S.A. — RFFSA) is responsible for 
suburban networks throughout Brazil. By 1994 the government 
had approved plans to privatize RFFSA. A new railroad running 
westward from Santos through agricultural lands, then north 
reaching near the Amazon's southwestern margin, is being 
built by a private entrepreneur's railroad company, Ferronorte. 

Subways 

Recife, Rio de Janeiro, and Sao Paulo have new urban sub- 
way systems. Sao Paulo's Metro, the first in Brazil, began operat- 
ing in 1975. It is clean, safe, cheap, and efficient. It has two 
main lines intersecting at Praca de Se. One runs north-south 
from San tana to Jabaquara. Another runs east-west from Corin- 
thians Itaquera to Barra Funda. A third line runs from Clinicas 
in the west, along Avenida Paulista, to Ana Rosa in the south, 
joining the Jabaquara line at Paraiso and Ana Rosa. 

Rio de Janeiro also has a good, clean, and fast Metro service. 
The nineteen-kilometer Line One operates between Tijuca and 
Botafogo, via the railway station and Gloria. It is being 
extended one kilometer at the Tijuca end and seven kilometers 
on the new South Line from Botafogo to Ipanema and Leblon 
(Jardim do Allah) via Copacabana. Line Two runs past the 
Maracana Stadium northward to Iraja and eventually will oper- 
ate form Praca 15 de Novembro through the city center to Esta- 
cio. 

Airports 

Air travel is very important for a country the size of Brazil. It 
has 3,581 airports, 3,024 of which are usable. The airports 
include 436 with permanent-surface runways, two with runways 
more than 3,659 meters long, twenty-two with runways 2,440 to 
3,659 meters, and 598 with runways 1,220 to 2,439 meters. Prin- 
cipal international airports include the Campo Grande Air- 



205 



Brazil: A Country Study 

port, the Rio de Janeiro Airport, the Guarulhos Airport in Sao 
Paulo, and the Guararapes Airport in Recife. 

Ports 

Brazil has thirty-six deep-water ports. The largest ones are 
Belem, Fortaleza, Ilheus, Imbituba, Manaus, Paranagua, Porto 
Alegre, Recife, Rio de Janeiro, Rio Grande, Salvador, Santos, 
and Vitoria. With the possible exception of Argentina and Uru- 
guay, ocean-shipping arrangements are easier to the United 
States and Europe than to the rest of Latin America. In January 
1993, the Brazilian Congress approved legislation that could 
allow for the privatization of the nation's ports. Brazil's major 
port, in terms of the value of exports and imports, has long 
been Santos, Sao Paulo State, followed by the ports of Rio de 
Janeiro and Vitoria. Although all three ports handle some 
trade with other Latin American countries, they traditionally 
have handled more trade with Europe and the United States, 
and the Japanese presence has been increasing. Santos is Latin 
America's largest port. Located seventy-two kilometers south of 
Sao Paulo, it handles a daily average of 50,000 tons cargo. In 
1994 Santos handled its largest volume of cargo since it first 
started operations in 1892. A total of 3,960 ships with 31.4 mil- 
lion tons of cargo passed through the port in 1994. 

Inland Waterways 

River transport accounts for only a minor part of the move- 
ment of goods. In 1988 total freight carried was 7.7 million 
tons, as compared with 4.7 million tons in 1980. Brazil has 
50,000 kilometers of inland waterways. The three major river 
systems are the Amazon, the Parana, and the Sao Francisco. 
The Amazon is navigable for 3,680 kilometers to Iquitos, Peru. 
Oceangoing ships can reach as far as Manaus, 1,600 kilometers 
upstream. There are plans to link the Amazon and Upper 
Parana. In addition, a 3,442-kilometer waterway system is being 
created by extending the Tiete-Parana river network along the 
Paraguai and Parana rivers as far as Buenos Aires. 

Merchant Marine 

The merchant marine, the largest in Latin America, has 220 
ships totaling 5,139,176 gross ton weight (GTW) and 8,695,682 
deadweight tons (DWT). It has five passenger-cargo, forty 
cargo, one refrigerator cargo, twelve combination ore/oil, 
sixty-five bulk, two combination bulk, and eleven vehicle car- 



206 



The Economy 



rier ships. In addition, one naval tanker is sometimes used 
commercially. 

Telecommunications 

Brazil has a good system of telecommunications, including 
extensive microwave radio-relay facilities. In 1995 the country 
had 13,237,852 telephones. It has as many as 3,171 broadcast 
stations. These include 1,265 FM, 1,572 medium-wave, and 
eighty-two tropical-wave radio stations and 257 television sta- 
tions. 

In 1995 the Roman Catholic Church organized a UHF satel- 
lite television channel broadcasting to eight states under the 
aegis of the Brazilian Institute of Christian Communication. 
The Brazilian government founded the Brazilian Radio Broad- 
casting Company (Empresa Brasileira de Radiodifusao — Radio- 
bras) in 1975 to unite all existing state-owned broadcasting 
stations and to create new radio and television services capable 
of reaching the Amazon region. 

Until the 1988 constitution, the president had the exclusive 
prerogative to allocate radio and television concessions. In 
1981, after canceling the Tupi Network concessions, the mili- 
tary government very capriciously selected political allies to set 
up new networks — Manchete, Bandeirantes, and the Brazilian 
Television System (Sistema Brasileiro de Televisao — SBT) — 
and passed over other communications enterprises (the news- 
paper Jornal do Brasil and the publisher Editora Abril, for exam- 
ple). From 1985 through 1988, television and radio con- 
cessions became the "currency of political negotiation" as Pres- 
ident Sarney tried to maintain majorities in Congress. As a 
result, many evangelical (born-again Christian) organizations 
acquired radio and television concessions, much to the dissatis- 
faction of the Roman Catholic Church. 

In 1988 Radiobras and the official Brazilian News Agency 
became a single organization under the name Brazilian Com- 
munications Company (Empresa Brasileira de Comunicacao), 
which retained the Radiobras acronym. Today, Radiobras sta- 
tions can be heard all over the country and abroad. Its televi- 
sion programs also are transmitted throughout the country by 
Brazil Network (Rede Brasil). Brazil has six principal television 
networks: Globo (owned by Roberto Marinho), Manchete 
(Adolfo Bloch), Bandeirantes (Joao Jorge Saad), the SBT 
(Silvio Santos), Record (pentecostal Bishop Edir Macedo), and 
TV-Gaucha S.A. There is also an embryonic system of pay tele- 



207 



Brazil: A Country Study 

vision (cable, microwave, and satellite). Brazil is connected 
internationally by three coaxial submarine cables, three Atlan- 
tic Ocean International Telecommunications Satellite Organi- 
zation (Intelsat) earth stations, and sixty-four domestic satellite 
earth stations. 

Brazilian Telecommunications, Inc. (Telecomunicacoes 
Brasileiras S.A. — Telebras), a state-owned company with 
monopoly control over Brazilian telecommunications, oversees 
Brazil's telecommunications. According to Telebras, the Brazil- 
ian government is developing an indigenous cellular tele- 
phone project, called Eco-8, which by 1998 is supposed to 
enable telephone contact between anywhere in Brazil and 
some Central American countries. A 1995 constitutional 
reform proposal allowed for the privatization of Telebras. 

Brazil leads Latin America with at least 161 Internet net- 
works; second-place Mexico has 105 networks. Almost 80 per- 
cent of Brazil's largest nongovernmental organizations (NGOs) 
are connected with each other and with the Internet. Accord- 
ing to the Brazilian Telecommunications Company (Empresa 
Brasileira de Telecomunicacoes — Embratel), in early 1995 the 
Internet became available to any Brazilian with access to a tele- 
phone and a modem. Until then, the Internet had been avail- 
able only to researchers linked to educational institutions or 
NGOs. 

Tourism 

Brazil's natural wonders include the Amazon; the wildlife- 
packed Pantanal wetlands; 8,850 kilometers of superb Atlantic 
coastline, including 3,200 kilometers of white sand beaches in 
the Northeast running from Sao Luis in the north to the Bahia 
Basin in the south; and the waterfalls at Foz do Iguacu. Brazil 
has one of the world's most spectacularly located cities, Rio de 
Janeiro, which hosts the annual Mardi Gras Carnaval (Carni- 
val) ; one of the largest cities, Sao Paulo; one of the most mod- 
ernistic, Brasilia; and one of the most ecologically advanced, 
Curitiba. Other popular cities include Salvador, Ouro Preto, 
and Manaus. 

Traditionally, Brazilian politicians have regarded travel and 
tourism as elitist and an unnecessary luxury. This view has been 
changing, however, as politicians have begun to see travel and 
tourism as a major industry. In the early 1990s, about 6 million 
jobs were linked to Brazil's travel and tourism industry. The 
industry is one of the country's biggest employers, involving 



208 



The Economy 



one in every eleven workers. It contributes an estimated 8 per- 
cent to the country's GDP. This figure compares favorably with 
Latin America's average of 5.1 percent, but it is well below the 
world average of 10.2 percent. 

Since the United Nations-sponsored Rio Earth Summit 
(Eco-92) in 1992, the Brazilian government has targeted ecot- 
ourism as a priority. For example, the government is encourag- 
ing foreign investment in tourist facilities in Amazonia. The 
Ministry of Commerce, Industry, and Tourism includes a cabi- 
net-level official in charge of tourism policies. The National 
Secretary of Tourism and Services, the National Tourism 
Board, and the state and municipal tourist authorities are 
responsible for the day-to-day administration of the sector. 

The development of tourism in the seven states that make 
up the impoverished Northeast has received special attention. 
More than 3 million Brazilian and foreign visitors boosted 
hotel occupancy in the Northeastern states from 43 percent in 
1991 to 67 percent in 1993. 

In 1992 some 2,235,000 passengers flew to Brazil, an 
increase of 14.5 percent from 1991, and the same number flew 
out of Brazil. About 513,000 of these visitors flew between 
Argentina and Brazil, and according to Brazil's Civil Aviation 
Department (Departamento de Aviacao Civil — DAC), more 
than 541,000 passengers flew between the United States and 
Brazil, an increase of 10.4 percent from 1991. The Brazilian 
Tourism Agency (Empresa Brasileira de Turismo — Embratur) 
found that 72.6 percent of those who came to Brazil in 1992 
came for tourism; the rest came for business, conferences, and 
conventions, including Eco-92. In 1993 about 1.6 million for- 
eign visitors traveled to Brazil. 

Privatization 

The rise in interest in the privatization of state-owned enter- 
prises in Brazil that began in the 1980s reflects similar trends 
worldwide. Although much of the rhetoric used by the advo- 
cates of privatization emphasized economic efficiency and 
competitiveness, much of Brazil's privatization experience 
since 1990 is better understood as a response to the fiscal pres- 
sures on the public sector, which worsened significantly in the 
1980s. 

The sale of state enterprises to private buyers, both domestic 
and foreign, offered an attractive means to reduce the fiscal 
pressures. First, the sale of an enterprise provided an immedi- 



209 



210 




Iguagu, Falls, Foz do Iguafu 
Courtesy Larry Buzard 



211 



Brazil: A Country Study 

ate revenue gain for the government. Second, to the extent 
that the enterprise sold was operating at a loss, the future fiscal 
burden on the public sector was reduced. Finally, the conver- 
sion of a state enterprise into a profitable private one increased 
the future tax revenues of the government. 

Implicit in these motives for privatization is a difficult choice 
for the government. The first reason suggests that the greatest 
immediate revenue effect would be obtained from the sale of 
the most profitable firms, such as the CVRD (Rio Doce Valley 
Company), Brazil's iron mining and exploring complex. The 
second consideration, however, suggests that long-term reve- 
nue benefits would be more likely from the sale of enterprises 
that have had a long history of low or negative returns, such as 
the RFFSA (Federal Railroad System, Inc.). Brazilian privatiza- 
tion experience and policies since the 1980s reflects the diffi- 
culty of deciding which firms to privatize first. 

Although some privatization occurred between 1980 and 
1990, it was confined to cases in which the federal government 
had taken over firms in financial difficulties, and did not touch 
any of the major state-owned enterprises that had been estab- 
lished purposely by the federal government and by some state 
governments in the preceding three decades. In all, only thirty- 
eight enterprises were privatized by the federal government 
before 1990, and the total receipts of the government were 
only US$723 million. 

Policy changed significantly with the entrance of the Collor 
government in 1990, which made privatization one of the 
major planks of its economic platform. The National Privatiza- 
tion Program (Programa Nacional de Desestatizacao — PND), 
which was created by the National Economic Development 
Bank (Banco Nacional de Desenvolvimento Economico — 
BNDE), expanded the scope of privatization to include a num- 
ber of the enterprises formerly considered as "strategic" by ear- 
lier governments. During the Collor government between 1990 
and 1992, fifteen state-owned enterprises were privatized, yield- 
ing about US$3.5 billion in total proceeds. The most important 
sale was that of the Minas Gerais Iron and Steel Mills, Inc. (Usi- 
nas Siderurgicas de Minas Gerais S.A. — Usiminas) steel com- 
pany in October 1991, which alone accounted for nearly twice 
the revenue of all previous privatizations and sold for US$2.3 
billion. The Japanese holding company Nippon Usiminas 
acquired about 18 percent of the shares. During this period, 
most sales were exchanges of equity in state-owned enterprises 



212 



The Economy 



for different types of public debt or "soft money," rather than 
for cash. 

Under the Franco government (1992-94), privatization con- 
tinued but with a greater emphasis on sales for cash. Eighteen 
state-owned enterprises were sold, yielding over US$5 billion. 
Among the most important enterprises sold in this period was 
the Brazilian Aeronautics Company (Empresa Brasileira 
Aeronautica — Embraer), an aircraft manufacturer, which had 
been established in 1969 and controlled by the Ministry of 
Aeronautics. By 1994 only twenty-five state-owned enterprises 
had been sold, mostly in exchange for debt certificates and lit- 
tle hard cash. Other enterprises included several chemical, fer- 
tilizer, and mining companies, with the steel sector wholly 
privatized by the end of 1994. 

Privatization policy under the Cardoso administration, 
beginning in 1995, shifted focus to state-owned enterprises 
responsible for the major part of Brazil's economic infrastruc- 
ture, among them enterprises in the energy, transportation, 
and communications sectors. The first major privatization was 
the sale of the Espirito Santo Power Plants, Inc. (Espfrito Santo 
Centrais Eletricas S.A.— Escelsa), the federally owned power 
company serving the state of Espirito Santo, in July 1995. In a 
departure from earlier policy, the CVRD, one of Brazil's largest 
state enterprises, was included in the program by the new gov- 
ernment. Although Brazil's largest state-owned enterprises, 
Petrobras, remained outside the program because of constitu- 
tional restrictions, appraisals were begun of the RFFSA and of 
the remaining federally owned power companies. 

Exchange-Rate and Balance of Payments Policies 

Many of Brazil's economic difficulties since the 1970s have 
been blamed on external economic shocks. Brazil's heavy 
dependence on imported petroleum and on capital inflows 
from other countries made it highly vulnerable to sharp rises in 
oil prices and to increases in interest rates. Even when prices 
and interest rates declined in the late 1980s from their earlier 
peaks, Brazil's economic problems persisted. Brazil was surpris- 
ingly successful in adjusting its external payments after the for- 
eign debt crisis, which began with the Mexican default in 
August 1982. However, Brazil paid a heavy domestic price for 
external adjustment. Short-term measures to alleviate the bal- 
ance of payments, moreover, delayed long-term moves toward a 
more open and efficient economy. 



213 



Brazil: A Country Study 

Exchange Rates and Foreign Trade 

The single most important policy tool for influencing Bra- 
zil's balance of payments is the exchange rate. Brazilian 
exchange-rate policy has evolved over the past several decades. 
Policy makers and Brazilian exporters believed that trade flows 
in the 1960s and 1970s were most effectively managed through 
trade policies such as tariffs (see Glossary), import controls, or 
export incentives. Beginning in the 1980s, they began to recog- 
nize that balance of payments adjustments may be more effi- 
ciently pursued using the exchange rate, rather than tariffs, 
subsidies, and direct controls on trade. This evolution in think- 
ing reflects in part the increasing skepticism among many Bra- 
zilians, both economists and policy makers, about the 
government's ability to maintain external balance using trade 
policy without creating severe economic distortions. 

Even more important, however, was the exchange-rate expe- 
rience of the early 1980s. Following the onset of Mexico's debt 
crisis in 1982 and the resulting inability of Brazil to continue to 
finance its current-account deficit through external borrowing, 
the cruzeiro was devalued sharply against the dollar in Febru- 
ary 1983. Unlike the earlier "maxidevaluation" of December 
1979, which was soon undermined by rapid increases in inter- 
nal cruzeiro prices, the real depreciation of the cruzeiro result- 
ing from the 1983 adjustment was maintained for the next 
several years. Exports increased substantially in 1983 and 1984, 
and the value of imports fell by over US$5 billion between 1982 
and 1984. Although some of this decline resulted from the fall 
in petroleum prices from their record levels in 1981, the 
response of the trade deficit to the large and sustained real 
depreciation of the cruzeiro provided clear evidence that Bra- 
zil's external adjustment problem could be addressed through 
exchange-rate policy. The experience of the early 1980s, in 
fact, led to the recognition that Brazil's real problem was not 
the private sector's lack of response to the exchange rate, but 
the inability of the domestic economy, particularly the public 
sector, to generate the net saving that is the counterpart of a 
current-account surplus. 

Brazil's success in moving the current account into surplus 
after 1982 implied a corresponding adjustment in either net 
private saving (private saving minus private investment) or in 
public-sector saving (tax receipts and other public revenues 
minus public expenditures). Because net public-sector saving 
actually deteriorated in the 1980s, the burden of adjustment 



214 



The Economy 



fell on the private sector, particularly on investment. The dra- 
matic fall in investment after 1982 had important conse- 
quences for Brazilian competitiveness and hence for the 
potential benefits that Brazil would derive from trade reform. 

Thus, the experience of the early 1980s suggests that the 
Brazilian economy had responded to real exchange rates (see 
Glossary) that facilitated external adjustment, but the policy 
also reduced domestic private investment and future economic 
growth. In retrospect, the delay among policy makers in using 
the exchange rate as the primary tool for achieving external 
balance is surprising. Their approach may have been influ- 
enced in part, however, by the success of the "crawling-peg" 
policy instituted in August 1968. This policy consisted of small 
but frequent adjustments in the nominal exchange rate in line 
with Brazilian inflation and price changes in Brazil's major 
trade partners, primarily the United States. It ushered in a long 
period of real exchange-rate stability, broken only a decade 
later by the December 1979 devaluation. The crawling-peg pol- 
icy was a marked improvement over the earlier exchange-rate 
regime, in which the combination of domestic inflation and a 
nominal exchange rate fixed for long periods of time resulted 
in large fluctuations and uncertainty about the real exchange 
rate. The real rate may in fact have been too stable, however, 
leading Brazil to delay the appropriate exchange-rate response 
to the external shocks of the 1970s. 

A rise in the real exchange rate represents an increase in 
Brazilian price competitiveness in international markets. Such 
an increase in price competitiveness could be caused by a 
depreciation of the cruzeiro against the dollar, a rise in United 
States prices, or a fall in Brazilian prices. A slowing of inflation 
in the 1970s made Brazil more competitive, while the rapid 
acceleration of inflation in the second half of the 1980s sub- 
stantially eroded Brazil's price competitiveness. Unlike other 
episodes in which the actual effects of a devaluation were rap- 
idly undercut by Brazilian inflation, the 1983 real devaluation 
was maintained through frequent adjustments in the nominal 
exchange rate, sufficient to maintain Brazil's price competitive- 
ness in international markets until the 1986 Cruzado Plan 
froze the nominal exchange rate (see fig. 11; table 12, Appen- 
dix). 

A number of implications for Brazil's balance of payments 
policy are clear from exchange-rate trends and movements in 
the current account. First, by the 1980s it was clear that Brazil- 



215 



Brazil: A Country Study 



EXCHANGE RATE 
(MARCH 1986 = 100) 



120.0 
100.0 
80.0 
60.0 
40.0 
20.0 




0.0 



DEVALUATION OF FEBRUARY 1983 



DEVALUATION OF DECEMBER 1979 
! f i 

IMPLEMENTATION OF CRAWLING 
PEG IN AUGUST 1968 



CRUZADO PLAN OF 1986 

! 



I I I I I I I 

1964 1968 1972 




BRESSER PLAN OF JUNE 1987: 
SUMMER PLAN OF JANUARY 1989 

COLLOR PLAN OF 1990 



COLLOR PLAN OF 1991 



1976 



IT 

1980 



i i i i i i i 
1984 1988 1992 



YEAR 



NOTE — The cruzeiro/dollar exchange rate is adjusted for price trends in Brazil and dollar exchange rates. 



Source: Based on information from Donald V. Goes,, "Macroeconomic Stabilisation 
and Trade Liberalization: Brazilian Experience and Choices," World Economy 
[Oxford] , 17, No. 4, July 1994, 439; and an updated chart provided by the 
author. 



Figure 1 1 . Brazil's Real Exchange Rate and Government Interven- 
tion, 1964-92 

ian trade flows were strongly responsive to the real exchange 
rate. If "elasticity pessimism," which hypothesizes that trade 
responses to relative prices are low, was ever justified in the Bra- 
zilian case, those days were long past. Since the late 1960s, Bra- 
zil has ceased to be a developing country in terms of its trade 
flows. Traditional primary products, such as coffee, cocoa, or 
sugar, in recent years have accounted for less than a third of 
the value of Brazilian exports. The increasing importance of 
manufactured exports, as well as the variety of local import sub- 
stitutes, makes Brazil's trade balance responsive to real 



216 



The Economy 



exchange-rate changes. This responsiveness removes one of the 
traditional justifications for extensive tariff and import restric- 
tion policies and for administrative intervention in trade to 
attain external balance. The evidence of the past several 
decades suggests that Brazil can attain external balance without 
extensive market intervention, however harsh the domestic 
effects of external adjustment. 

Second, the introduction of a degree of indexation of the 
nominal exchange rate in the form of the crawling-peg policy 
has permitted the external sector to avoid some of the conse- 
quences of domestic inflation that would otherwise have pro- 
duced much more severe external payments crises. Real 
exchange rates remained relatively stable for a decade after the 
policy's introduction in 1968. Unlike several other Latin Ameri- 
can countries such as Argentina, Brazil avoided the sharp 
swings in the real exchange rate resulting from domestic infla- 
tion and infrequent adjustment of the nominal rate. When Bra- 
zil departed from this pattern, as it did in 1986 during the 
Cruzado Plan, policy makers soon learned that this was a mis- 
take. Subsequent stabilization plans, even if they were failures 
for other reasons, at least did not succumb to the temptation to 
use the exchange rate as an anti-inflationary weapon. 

Finally, and perhaps more negatively, Brazilian exchange- 
rate policy transformed Brazil's external adjustment problems 
of the early 1980s into more intractable domestic balance prob- 
lems in the early 1990s. Contrary to the initial expectations of 
many observers, Brazil was able to solve its external balance 
problem after the 1982 debt crisis with surprising speed. The 
cost was a sharp increase in the demand for domestic saving to 
replace lost foreign capital inflows. With little increase in net 
public-sector saving or in private-sector gross saving, invest- 
ment fell substantially, undercutting the growth of the Brazil- 
ian capital stock and the economy's potential growth in 
competitiveness. 

Capital Flows and the External Debt 

Much of Brazil's economic experience in the past two 
decades has been dominated by large capital inflows that 
attained record levels in the 1970s, only to collapse after 1983 
in the wake of the Mexican debt crisis. For the rest of the 
decade, Brazil coped with the consequences of this collapse, 
and only in the 1990s did capital again begin to flow into the 



217 



Brazil: A Country Study 

Brazilian economy, with a substantial increase after the Real 
Plan. 

The enormous inflow of external capital to Brazil that ended 
in 1982 had its roots in a number of policies and institutional 
changes in the preceding two decades. The military govern- 
ment that seized power in April 1964 quickly reformed existing 
laws governing direct foreign investments, including liberaliz- 
ing restrictions on remittances of profits and simplifying proce- 
dures for reinvestment of profits. The changes did not address 
the effects of inflation in the currency of the lending country, 
however, so that the real returns on a direct investment were 
affected negatively by inflation in dollar prices. The negative 
effect of dollar inflation on a direct foreign investment in Bra- 
zil arose because the original investment was registered in a 
fixed dollar amount, on which allowances for profits and remit- 
tances were calculated. A million-dollar investment in 1964, for 
example, would still be registered as a million-dollar invest- 
ment in 1974. Higher nominal dollar profits in 1974 would 
then result in a substantially higher nominal profit rate and a 
heftier Brazilian tax, thus lowering the real return. 

Financial lending to Brazil was different because the interest 
rate on the loan, usually denominated in dollars, incorporated 
the market's expectations of inflation. The asymmetrical treat- 
ment of financial capital flows and direct investment was one of 
the reasons total capital flows to Brazil in the post-1964 period 
were dominated by bank lending, which at times was ten times 
as great as foreign direct investment. 

Among the other changes that encouraged large financial 
capital flows to Brazil was Law 4,131, which allowed final bor- 
rowers to deal directly with foreign lenders after approval by 
the Central Bank of Brazil (Banco Central do Brasil — Bacen; 
see Glossary). Another vehicle for capital flows was Resolution 
63, which permitted Brazilian banks and authorized subsidiar- 
ies of foreign banks to obtain dollar loans abroad and reloan 
the proceeds to one or more domestic borrowers. Finally, the 
increasing participation of the Brazilian government as a bor- 
rower itself, backed by explicit "full faith and credit" guaran- 
tees and by the implicit assumption that taxes could be levied 
to pay for loans to the government, made lending to Brazil an 
increasingly attractive option for foreign banks. 

Equally important in explaining the sharp rise in financial 
lending to Brazil after the mid-1960s were changes in interna- 
tional financial markets. International banks began to negoti- 



218 



The Economy 



ate variable interest rate loans, in which the borrower and the 
lender agreed to reset the loan's interest rate at specified inter- 
vals, usually six months, on the basis of a rate that neither the 
borrower nor lender controlled (usually the London Interbank 
Offered Rate — LIBOR), or the United States prime rate. 
Added to this underlying rate was a "spread," or premium 
charged to borrowers like Brazil, based on the market's assess- 
ment of any additional risk compared with the risks associated 
with prime borrowers. Finally, the rise in syndicated bank lend- 
ing, in which one "lead" bank organized the loan and then sold 
portions of it to other international lenders, permitted banks 
to expand substantially their loans to borrowers like Brazil. 

Together, these innovations cleared the way for lending on a 
scale that was unprecedented in Brazil's history and with few 
parallels elsewhere in the world. Because the loans were 
denominated in the creditor country's currency, they were iso- 
lated effectively from inflation in cruzeiro prices. As long as the 
value of Brazil's export revenues grew at rates exceeding the 
interest rates charged on the loans, an assumption that 
appeared valid throughout the 1970s, the burden of the exter- 
nal debt in relation to Brazil's capacity to repay it would fall. 

Although it is easy from the vantage point of the 1990s to 
criticize the volume and terms of much of the bank lending to 
Brazil, at the time it appeared to be an extremely attractive 
option for a borrower like Brazil. When inflation in the curren- 
cies of the lending countries is subtracted from the rates 
charged on loans to Brazil, real interest rates on these loans in 
the 1970s were negligible and often negative. The nominal and 
real interest rates in the markets in which Brazilian external 
borrowing occurred do not include the spread paid by Brazil, 
which during the 1970s and early 1980s was generally between 
1 percent and 2 percent. Nevertheless, these rates do show 
clearly why foreign borrowing appeared to be such an attrac- 
tive option for Brazil. 

The debt crisis that began in Mexico in August 1982 had an 
almost immediate impact on the ability of other Latin Ameri- 
can borrowers to maintain capital inflows. Even though Brazil's 
trade balance and current account had improved slightly in 
1981, loans from international lenders became increasingly 
scarce. Interest on new loans increased, and most lenders 
refused to roll over on existing loans. New lending dried up in 
the second half of 1982, reducing capital inflows, which had 
reached a peak in 1981, by more than a third. Private borrow- 



219 



Brazil: A Country Study 

ers in Brazil encountered a total cutoff of loans from foreign 
lenders, while official borrowing dropped sharply. By 1984 net 
capital inflows (public and private) were negligible by compari- 
son with earlier years, and by 1986 the country was experienc- 
ing a net capital outflow of US$7.3 billion, a sum nearly equal 
to Brazil's trade balance. The principal components of Brazil's 
balance of payments show this sharp drop in the net inflow of 
foreign capital after 1982 (see table 13, Appendix). 

The 1982 crisis interrupted for many years private Brazilian 
external borrowing. Private loans contracted under Law 4,131 
had leveled off in the late 1970s, and after 1982 net private bor- 
rowing under this law became negative. The fall in private bor- 
rowing under Resolution 63 was even more pronounced. After 
a rapid rise in such borrowing between 1979 and the 1982 debt 
crisis, this source of financing virtually collapsed, as the level of 
outstanding Resolution 63 debt was more than cut in half 
between 1982 and the end of 1987. 

Part, if not all, of the increase in external debt reported by 
the Central Bank after 1982 was simply forced lending to 
finance interest payments. It did not have a real counterpart in 
the form of new resources entering the country through the 
capital account. As a result, Brazil's ability to tap external sav- 
ing to finance either public-sector borrowing or private-sector 
investment collapsed after 1982. 

A number of Brazilian economists have made the point that 
before 1982 net capital inflows more than covered service pay- 
ments (net interest, profits and dividends, and reinvested prof- 
its). After 1982 interest payments alone far exceeded net 
capital inflows, which turned negative after 1985. Although 
1982 is usually viewed as the turning point, the net capital 
transfer from the rest of the world actually began to decline in 
the mid-1970s. Brazil was only able to avoid an external pay- 
ments crisis in the late 1970s because lenders were willing to 
finance debt service through further lending. After the Mexi- 
can debt crisis in 1982, Brazil's own crisis could no longer be 
postponed. 

The 1986 Cruzado Plan exacerbated capital outflows. Real 
exchange-rate overvaluation, with increasing expectations of a 
future adjustment, was one factor. A second factor was the 
increase in uncertainty about future fiscal and monetary policy, 
as the shortages and informal markets produced by the price 
controls undercut the euphoria of the first few months. 



220 



The Economy 



During the rest of the 1980s, net capital outflow continued, 
further reducing Brazil's capacity to finance investments 
needed for future economic growth. In real terms, however, 
the external debt began to decline in the late 1980s, both as a 
result of debt renegotiation and a marking down of some of 
the debt by public and private lenders. Despite temporary 
interruptions in debt servicing, domestic political pressures in 
Brazil for a permanent repudiation of the external debt were 
rejected. As interest rates in international financial markets 
declined substantially in the early 1990s, the costs of servicing 
the remaining external debt were reduced further. 

Although the debt crisis that exploded in Brazil in the early 
1980s had not disappeared a decade later, it was no longer 
regarded as Brazil's central economic problem. Its effects, how- 
ever, lingered on in several forms. First, the steep fall in the 
availability of international reserves (see Glossary) after 1982 
sharply curtailed Brazilian investment. The resulting decline in 
capital formation was evident a decade later, as Brazilians faced 
the consequence of lower levels of investment in plant, equip- 
ment, and essential infrastructure. Second, international confi- 
dence in the financial soundness of external lending to Brazil 
remained low. When foreign capital began to return to Brazil 
in the early 1990s, it took a rather different form from the cap- 
ital inflows of the 1970s. Foreign capital inflows to Brazil in the 
early 1990s were smaller and were no longer dominated by 
loans from international banks. Instead, foreign lenders sought 
equity investments in Brazilian enterprises. Foreign firms with 
the capacity to manage direct investments in Brazil began to 
replace commercial banks as the primary source of foreign 
capital. 

Fiscal and Monetary Policy, the Public Sector, and 
Inflation 

In the 1980s, most Brazilians were convinced that the huge 
foreign debt was at the heart of their economic difficulties. A 
decade later, as other heavily indebted developing nations 
reduced inflation to negligible levels and began to grow again, 
it was more apparent that some of Brazil's economic difficulties 
were homemade. By the early 1990s, a new consensus had 
emerged among Brazilian economists and policy makers. It 
emphasized the role of the public sector in the economy and, 



221 



Brazil: A Country Study 

more specifically, the way in which public-sector expenditures 
are financed. 

By the late 1980s, the overhang of public debt had placed a 
servicing burden on the public sector that would have strained 
any government. Given its huge debt to private Brazilian credi- 
tors and foreign creditors alike, the public sector came to be 
viewed as practically bankrupt. With new foreign credit virtu- 
ally eliminated after 1982 and domestic credit increasingly 
costly, the government's only remaining recourse was to 
finance its deficit through the creation of money. This led in 
turn to an accelerating and unpredictable rate of inflation, 
which by the early 1990s was more than 4,000 percent at 
annual rates. 

Fiscal Trends in the 1980s 

In an inflationary economy like Brazil's, there are severe 
technical problems in quantifying fiscal trends. The basic diffi- 
culty stems from a large domestic public debt that is owed in 
cruzeiros. A large part of reported government expenditures is 
interest payments that simply compensate the debt holders for 
the effect of inflation (see table 14, Appendix). Government 
interest payments exploded in the 1980s, rising from less than 
1 percent of GDP in 1980 to an unmanageable 6.1 percent in 
1989, before being halted temporarily by the government 
freeze on payments in 1990. Despite the fact that new foreign 
resources were unavailable to Brazil after 1982, interest pay- 
ments on the existing public-sector external debt also 
increased substantially over the 1980s. 

An increase in domestic and foreign interest payments could 
be financed if other parts of the public sector's accounts were 
to change enough to create a "primary" budget surplus 
(approximately the difference between tax receipts and nonin- 
terest-related public expenditures). In Brazil the reverse hap- 
pened. The noninterest-related surplus declined sharply, 
beginning in the 1970s and accelerating in the late 1980s. 

A number of reasons account for this trend. Tax receipts as a 
share of GDP declined significantly in the early 1980s, partly as 
a result of the difficulties inherent in maintaining tax collec- 
tions with accelerating inflation. By the late 1980s, tax receipts, 
net of transfers for such items as social security, were insuffi- 
cient even to pay for public-sector wages and salaries and pur- 
chases of goods and services. 



222 



An Emb-120 Brasilia on the final assembly line at the factory of the 
Brazilian Aeronautics Company (Empresa Brasileira Aerondutica — 
Embraer) in Sao Jose dos Campos, Sao Paulo State 

Courtesy Embraer 

On the expenditure side, Brazil's return to a more open, 
democratic political system in the mid-1980s made it difficult, if 
not impossible, for political leaders to contain public expendi- 
tures for personnel costs, goods, and services. Between 1980 
and 1990, the share of such expenditures in GDP mushroomed 
from 9.2 to 15.6 percent. 

Grim as these trends were, they were probably underesti- 
mates of Brazil's true fiscal situation. In the early 1970s, the 
public enterprises were operated profitably, and the prices of 
their products and services at least kept up with inflation. With 
the acceleration of inflation after the two oil shocks in the 
1970s, the fiscal position of the public enterprises began to 
worsen, although this trend was not recognized widely until the 
1980s. 



223 



Brazil: A Country Study 

It was not until the 1980s that the Erazilian government, 
partly because of pressure from foreign creditors and multilat- 
eral organizations, such as the International Monetary Fund 
(IMF — see Glossary) and the World Bank (see Glossary), began 
to publish more extensive statements on the public sector's 
finances. In 1983 the government began preparing estimates of 
the Public Sector Borrowing Requirement (PSBR). These esti- 
mates included not only the expenditures of the federal, state, 
and local governments but also those of state enterprises, social 
security authorities, and a number of previously "off-budget" 
activities. These estimates clearly show that Brazil's fiscal imbal- 
ances worsened even more in the 1980s than is suggested by 
more traditional measures. 

Had the worsening trend in the PSBR been simply the result 
of increases in nominal interest payments, inflation alone 
might have been blamed. In fact, many of the intellectual pro- 
ponents of what became the Cruzado Plan made this argument 
in the 1980s. These proponents maintained that if inflation 
could be stopped (through a price freeze or other means), the 
public sector's deficit would disappear. Even if the effects of 
inflation were accounted for, however, Brazil would have had a 
large public-sector debt. 

Pressures on Public-Sector Expenditures in the 1980s 

Despite the popular image of Brazil's public sector as a prof- 
ligate spender and intense consumer of resources, public 
expenditures as a share of national product remained relatively 
stable until the mid-1980s. The containment of public spend- 
ing under the government of President Joao Batista de OHveira 
Figueiredo (1979-85) at the federal level included limitations 
on hiring and expenditures on goods and services as well as 
cuts in public investment. Spending by state and local govern- 
ments was limited by reductions in the revenues transferred to 
them by the federal government. 

Total spending for public-sector wages and salaries, which 
had actually declined as a share of national product between 
the early 1970s and 1984, only began to increase when the gov- 
ernment of President Jose Sarney (1985-90) took over, reach- 
ing almost 10 percent of GDP in 1989. Public-sector spending 
on goods and services as a share of GDP also increased under 
President Sarney. A fall in net subsidies to the private sector 
and a stable level of social security spending were not sufficient 
to offset a sharp rise in government spending on wages and sal- 



224 



The Economy 



aries. The expansion of public spending after 1985 occurred at 
all levels of government. At the federal level, it was partly 
caused by the efforts of President Sarney to secure a full five- 
year mandate, reinforced by the misperception that Brazil's 
budget deficit would be negligible if the effects of inflation on 
it were discounted. At the state and local levels, greater reve- 
nues were available as a result of changes in federal transfers 
after 1985, a trend reinforced by the 1988 constitution. Much 
of this spending went for current expenses, primarily person- 
nel, rather than investment in infrastructure. Even with this 
expansion in state and local spending, however, the federal 
government remained responsible for about two-thirds of total 
expenditures. State spending was primarily for education and 
health, and local government expenditures were devoted prin- 
cipally to housing and urban development. At all levels of gov- 
ernment, however, much of this spending, whatever the 
announced function, was for personnel and administrative 
costs. 

The worsening of Brazil's public-sector finances in the 1980s 
was in part the consequence of the political and administrative 
decentralization that took place following the return to civilian 
rule in 1985. In 1988 the new constitution made this decentral- 
ization explicit, transferring to state and local governments a 
substantial part of the revenues that were formerly received by 
the federal government. There was not, however, a parallel 
decentralization of expenditure responsibilities. The federal 
government retained most of its functional responsibilities, 
while losing a significant part of its revenues. 

Trends in tax revenues after 1983 further aggravated Brazil's 
public-sector finances. Tax receipts as a share of GDP fell 
sharply after 1983, having averaged about 25 percent in the 
preceding decade. With the exception of the atypical year of 
1986 (the Cruzado Plan), they did not regain such levels until 
the first years of the Collor de Mello government, when 
increases in income taxes and social security contributions, as 
well as taxes on manufactured goods and financial operations, 
slowed the decline in revenues. 

Although the federal government in the early 1990s made 
determined efforts to maintain its income by enforcing tax col- 
lection, these efforts met with limited success. Public cynicism 
about the government's use of tax revenues, fed in part by the 
corruption scandal that forced Collor de Mello from office in 
September 1992, led to increased tax avoidance and in many 



225 



Brazil: A Country Study 

cases to outright tax evasion. Although little firm evidence is 
available to quantify tax evasion, considerable anecdotal and 
fragmentary evidence suggests that it rose significantly in the 
1980s and early 1990s. With the increased financial opening of 
the economy, many Brazilians sought to shelter income derived 
from financial assets by placing them outside Brazil, even when 
before-tax returns in Brazil were substantially higher. Capital 
flight from Brazil, which had not been as serious a problem as 
it had been for a number of other Latin American nations in 
the 1970s and early 1980s, accelerated significantly in the late 
1980s. Other ways in which Brazilians evaded taxes included 
substantial understatement of income from professional and 
service activities and the widespread practice of making trans- 
actions without documentation for tax purposes. 

The adoption of the new constitution in 1988 had a signifi- 
cant impact on public-sector finances. Many Brazilians viewed 
it as the vehicle through which to redress what they regarded as 
excessive concentration of powers at the federal level. Conse- 
quently, strong support existed for decentralizing government 
and shifting power from the presidency to the Congress. Many 
Brazilians also saw the new constitution as a way not only to 
guarantee civil rights but also to secure specific economic 
rights in the areas of health, education, employment guaran- 
tees, and social security. 

The result was a document that is far more specific and 
lengthier than those of most other nations. Some advances 
were made in the arrangement of public finances, among them 
restrictions on off-budget spending by the executive and better 
defined procedures for the preparation and passage of an 
annual budget. In a larger sense, however, the 1988 constitu- 
tion made the potential for fiscal deterioration more likely, 
especially at the federal level. It not only reduced the revenues 
that went to the federal government by transferring them to 
states and municipalities but also linked many revenue sources 
to specific objectives, further restricting the federal govern- 
ment's ability to allocate expenditures. In addition, the new 
charter actually expanded some federal responsibilities in a 
number of areas, among them law enforcement, education, 
and cultural affairs. Another provision granted tenure to pub- 
lic employees after two years. The constitution strengthened 
employment and pension guarantees and the explicitly main- 
tained pension and retirement rights based on length of ser- 
vice — thirty-five years for men and thirty years for women — 



226 



The Economy 



without regard to age at retirement. Together, these provisions 
made fiscal equilibrium, especially at the federal level, even 
more difficult to attain than it had been before 1988. 

A number of Brazilian economists and policy makers soon 
recognized the budgetary implications of the new constitution. 
The stabilization program of the new Collor de Mello govern- 
ment in 1990 temporarily halted the decline in federal govern- 
ment revenue through its price and wage freezes, but this was 
done at a very high cost. The dramatic freezing of most Brazil- 
ians' financial wealth under the first Collor de Mello plan 
raised basic legal and constitutional questions about the fiscal 
rights and responsibilities of the government. A number of 
Brazilian legal scholars questioned the right of the government 
to impose what they argued was a tax, not allowed for in the 
constitution, through the freezing of assets whose full real 
value would not be repaid to their holders. 

By the early 1990s, a consensus had emerged that successful 
economic and price stabilization would require profound 
changes in Brazil's fiscal system and, if necessary, amendments 
to the 1988 constitution. Although such views were rejected vig- 
orously if suggested by others, such as the IMF or foreign lend- 
ers, many Brazilians recognized that the 1988 constitution had 
created a number of fiscal problems. In October 1991, the Col- 
lor de Mello government submitted to Congress a series of pro- 
posals aimed at reducing the fiscal pressures at the federal 
level. Among the proposed changes were modifications of the 
constitutional obstacles to administrative reform, limitations 
on the constitutional guarantees for social security, and author- 
ity to create new sources of federal tax revenue. With the ero- 
sion of support for the Collor de Mello government during 
1992, the proposals had little chance of passage, and the funda- 
mental fiscal disequilibrium continued under the administra- 
tion of Itamar Franco (1992-95), Collor de Mello's successor. 

Fiscal Deficits and Inflation 

The root of Brazilian inflation has been the monetization of 
the public sector's fiscal deficit, because deficits that are not 
financed by borrowing either from abroad or domestically 
must be covered by the creation of money. By the early 1990s, 
the old debate between the monetarists (see Glossary), who 
emphasized the central role of money supply growth in the 
inflationary process, and the structuralists (see Glossary), who 
attributed price increases to supply problems in developing 



227 



Brazil: A Country Study 

economies like Brazil's, was viewed as an obsolete and largely 
sterile discussion. Instead, debate focused on the causal rela- 
tionship between inflation and the money supply, and on how 
much freedom the government actually had in determining 
money-supply growth. 

However important monetization of the public sector's fiscal 
deficit may have been in the past in either initiating or acceler- 
ating inflation, the reinforcement of the inflationary process 
by past inflation and by expectations of future inflation was an 
important part of the Brazilian experience in the 1980s and 
1990s. In Brazil the feedback effect of past inflation has been 
institutionalized in an extensive indexation or "monetary cor- 
rection" (correfdo monetdria) system, which was developed and 
extended to most markets between 1964 and 1970. The result 
was an economy in which apparently modest initial shocks 
could be transformed into high and continuing inflation. Rec- 
ognition of this feedback effect in the early 1980s played a role 
in the design of the 1986 Cruzado Plan, as well as in subse- 
quent stabilization attempts, notably the ifoa/Plan in 1994. The 
inflation indexation system, which in the 1970s had been virtu- 
ally unquestioned, was increasingly blamed for contributing to 
the continuation and acceleration of inflation in the 1980s and 
early 1990s. 

Although inflation accelerated significantly in the 1980s, it 
had long been a feature of Brazil's economy. The first major 
inflationary surge began in the late 1950s and continued until 
1964, in part the result of the monetary accommodation of fis- 
cal pressures resulting from a sharp rise in government expen- 
ditures. A second surge began in the 1970s, partly as a result of 
the external shocks caused by the rise in energy prices. The 
indexation system served as a vehicle for amplifying energy 
price increases into higher widespread price increases than 
might have occurred. Inflation worsened dramatically in the 
1980s, however, as Brazil lost its access to foreign capital mar- 
kets and domestic borrowing to finance the growing public-sec- 
tor deficit became increasingly expensive (see table 15, 
Appendix). Inevitably, money creation became one of the pri- 
mary ways to finance the deficit. 

It is difficult for non-Brazilians to grasp the significance of 
double-digit inflation for forty years, with triple- and even qua- 
druple-digit inflation in the 1980s. By the late 1980s, annual 
rates of inflation were almost meaningless, and Brazilians 
themselves routinely characterized inflation by its monthly 



228 



The Economy 



rate, which in the early 1990s was over 35 percent. Between the 
end of World War II and Brazil's RealPlan in 1994, the price 
level had increased more than 100 billion times. 

Not only did inflation accelerate over the 1980s, but the rate 
became more variable and less predictable. The frequency of 
price adjustments increased, and wage and salary adjustments 
that had once occurred annually were adjusted semiannually, 
then quarterly, and in some markets monthly, as inflation accel- 
erated. In other markets, especially the capital markets, infla- 
tion had similar effects in shortening contract periods. Few 
borrowers or lenders would dare to make long-term commit- 
ments, and by the late 1980s most Brazilian firms, as well as 
most wealthier individuals, held any excess assets in short-term, 
highly liquid deposits that were literally known as the "over- 
night." 

The rise in indexation in Brazil after 1964 had permitted the 
government to tap the supply of domestic saving by selling 
indexed government bonds to savers, who were thus protected 
against the effects of inflation on the value of such assets. 
Although indexed bonds were regarded as a great success in 
the 1960s and 1970s, the need to pay not only the interest but 
also the inflation adjustment became an increasing burden for 
the government in the 1980s. 

Despite the burden that indexed bonds placed on govern- 
ment finances as inflation accelerated, inflation itself appears 
to have been an important source of revenue for the govern- 
ment. The "inflation tax," which is the real income that the 
government receives through the issuance of new money, tends 
to increase with inflation, because nonindexed money or par- 
tially indexed financial assets issued by the government lose 
their real value. This loss in spending power incurred by the 
holders of money is in effect a tax, because the government 
spending financed by money creation is paid for by the loss in 
value of the money held by the public. Attempts have been 
made to measure the income that the Brazilian government 
earned through the inflation tax, and some estimates suggest 
that income from this source in the 1980s was over 3 or 4 per- 
cent of GDP. 

Brazil's Real Plan 

On July 1, 1994, Brazil implemented the last, and to date, 
most successful of its economic stabilization programs to end 
inflation. Nearly three years later, the Real Plan was intact, far 



229 



Brazil: A Country Study 

outliving its ill-fated predecessors. By late 1996, inflation by 
some measures approached an annual rate of less than 20 per- 
cent, a remarkable achievement in an economy that a few years 
earlier would have regarded even a monthly rate at this level a 
triumph. The new monetary unit created by the plan, the real 
(pi., reais; for value of the real, see Glossary), actually appre- 
ciated against the dollar in the months after its creation. 

The design and implementation of the Real Plan also distin- 
guished it from the earlier plans, and may help explain some of 
its success in its first years. Unlike the earlier plans, it did not 
depend on a general price and wage freeze to stop inflation. At 
the heart of the new plan was the de-indexation of the Brazil- 
ian economy, which was accomplished in part by converting sal- 
aries and a number of other prices in the months preceding 
the implementation of the Real Plan into Real Value Units 
(URVs), which were then linked to the United States dollar. 
After July 1, 1994, prices in URVs were converted into reais, 
which began officially at par with the dollar, but traded at a pre- 
mium in the open market. Although the new plan made no 
guarantees of automatic price and wage adjustments to com- 
pensate for inflation, few restrictions were placed on employers 
and employees in private wage negotiations. 

Although some observers characterized the Real Plan as a 
form of "dollarization" of the Brazilian economy, in which 
prices and wages that previously had been indexed to inflation 
were now linked to a foreign currency, there was a significant 
difference between Brazil's approach and that of countries like 
Argentina, which attempted to stabilize the value of their cur- 
rencies through a formal and legal link to the dollar. Brazil did 
not make such a commitment, and despite the stability of the 
real against the dollar throughout the first year and a half of the 
RealVl&n, there was a widespread expectation that the real 
eventually would depreciate. 

This exchange-rate policy and the expectations that accom- 
panied it had significant consequences for the domestic Brazil- 
ian economy. Expectations of an eventual depreciation of the 
currency, coupled with the short-term stability of the exchange 
rate and much greater mobility of financial capital between 
Brazil and world financial markets led to a strong appreciation 
of the rm/and painfully high domestic real interest rates. Lend- 
ers required interest rates that would protect them against a 
possible depreciation. With prices stable or even falling for 
some products, borrowers could not repay in currency that had 



230 



A young farmer and his father show the newly acquired title to their 
farm near Almirante Tamandare, Parana State. 
Courtesy Inter-American Development Bank, Washington 

lost its value through inflation, as they were accustomed to do 
in earlier years. 

International enthusiasm for the Real Plan, reinforced by its 
apparent success in its first year, led to the resumption of large- 
scale flows to Brazil, permitting the government to maintain its 
policy of approximate exchange-rate stability. Despite the wor- 
ries about a depreciation, and several speculative attacks 
against the real in its first year, the high level of capital flows to 
Brazil more than financed the high level of imports stimulated 
by the resumption of economic growth, leading to a sharp 
increase in Brazil's reserves of foreign currency. By late 1995, 
they totaled more than US$50 billion. 

The fall in inflation, supported in part by the strong real, led 
to important changes in income flows within the Brazilian 
economy. Decades of inflation had produced a large financial 
sector, which flourished in part through the spread between 
borrowing and lending rated in a high-inflation environment. 
With the fall in this revenue, a number of financial intermedi- 
aries came under severe pressure, despite the high real interest 
rates. During 1995 there were bank insolvencies, with failures 



231 



Brazil: A Country Study 

avoided by Central Bank intervention to merge these interme- 
diaries with stronger ones. 

The fall in inflation also had consequences for Brazil's 
income distribution. Lower-income groups, which had borne a 
disproportionately large share of the inflationary burden 
because of their relatively limited access to fully indexed sav- 
ings opportunities and to the tendency of minimum salaries 
and other nominal wages to lag behind inflation, benefited sig- 
nificantly from the RealVXan. In the months following its imple- 
mentation, sales of consumer durables, especially those 
purchased by lower-income groups, increased significantly, 
leading the government in 1995 to attempt to restrict con- 
sumption and reward saving. The rise in the real incomes of 
lower- income groups produced a level and depth of political 
support for the Real Plan that made it difficult for unions and 
other groups opposing many of the policies of the new Cardoso 
government to confront the RealVXm head on. It also may have 
helped the government in its efforts to secure the support of 
the Congress for a number of its proposed reforms. 

The Real Plan's success in its first year strengthened the polit- 
ical support that the government needed to attack the underly- 
ing fiscal disequilibrium. By 1995 the operational budget of the 
federal government was significantly smaller than it had been 
in earlier years, and the attempts by some organized sectors, 
among them the employees of state enterprises, to overturn 
many of the policies of the RealFlan had been resisted. Further 
progress in reducing the pressures on the finances of Brazil's 
public sector rested on the rates of the first year of the Real 
Plan, as well as on the support of Congress for the fiscal 
reforms proposed by the Cardoso government. 

By the end of 1996, the Real Plan appeared to have suc- 
ceeded in its objective of ending decades of inflation and mac- 
roeconomic uncertainty. It had also bought valuable time for 
the government to attack the underlying fiscal imbalance that 
generated the inflationary pressures. There was little time to be 
lost, however, and the rise in public-sector expenditures, espe- 
cially at the state and municipal levels, cast a cloud over the 
prospect for the long-run success of the Real Plan. This rise was 
the consequence of a number of factors, among them the 
surge in costs for public-sector employees created in part by the 
requirements of the 1988 constitution. In the short run, the 
rise in interest costs in the first year of the RealFlan was a heavy 
burden for many states and municipalities, some of which were 



232 



The Economy 



unable in 1995 to pay employees their full salaries. Other pres- 
sures on the public sector included rising pension and social 
security costs, caused in part by demographic trends and by the 
generous promises of earlier governments to future retirees. 

Trade Policies 

Brazil's economic history has been influenced remarkably by 
foreign trade trends and policies. Successive cycles of export 
booms in such commodities as sugar, gold and diamonds, rub- 
ber, and coffee played major roles in Brazilian development 
before World War II. In the 1930s, the collapse of coffee prices 
signaled a turn inward, resulting in a nascent industrialization. 
In succeeding decades, industrial development was fostered 
deliberately through restrictive trade policies, making Brazil a 
relatively closed economy by the mid-1960s. Only in the early 
1990s did Brazil begin significant liberalization of its trade poli- 
cies, and even these reforms were modest by comparison with 
those in a number of other Latin American nations. 

Government intervention in foreign trade has a long history 
in Brazil, reaching back to the colonial period when Portugal 
forbade Brazilian trade with other nations. Following indepen- 
dence in 1822, Brazil opened its ports and expanded its trade 
with other nations, particularly Britain. Extensive government 
regulation of trade continued, however, with tariffs providing 
over half of the government's revenue before World War I. 
Other forms of intervention in trade included the 1906 coffee 
price support plan, which was a sophisticated attempt to 
exploit Brazil's monopolistic position in the world coffee mar- 
ket. 

Before World War II, trade policies were used mostly as a 
source of revenue or as a response to specific groups such as 
the coffee producers, rather than as a means of achieving 
national economic goals. In the early 1950s, Brazil began to use 
trade policy in a more deliberate way to promote industrializa- 
tion. The forced reduction in Brazilian imports after 1929 had 
resulted in the first major industrial growth in Brazil, centered 
in Sao Paulo. Heeding this apparent lesson, policy makers in 
the 1950s argued that measures that deliberately reduced 
imports would stimulate domestic production, thereby encour- 
aging technological development and increasing employment 
in activities that were regarded as more "modern" than Brazil's 
traditional agricultural and extractive activities. 



233 



Brazil: A Country Study 

Between 1953 and 1957, Brazil attempted to use multiple 
exchange rates to encourage some trade transactions and dis- 
courage others. In 1957 the country instituted a broad ad valo- 
rem tariff system under Law 3,244. The new system created not 
only a new tariff structure but also the administrative machin- 
ery to impose or revise tariffs in accord with national develop- 
ment objectives and requests by domestic producers for 
protection. Implementation of the system heavily favored 
domestic producers of manufactured consumer goods, while 
permitting the import of capital and intermediate goods at 
much lower tariffs. For some goods, protection was great 
enough to completely eliminate competing imports from the 
Brazilian market. 

Following the imposition of military rule in 1964, Brazil 
once again modified its trade policies. The new government 
moved quickly to eliminate some of the restrictions on Brazil- 
ian exports, and it provided special incentives for exports of 
manufactures. In March 1967, it significantly cut tariffs, which 
fell to about half their former level in a number of sectors. Bra- 
zilian imports soon increased, but this was more the result of 
the acceleration of economic growth after 1967 than of the tar- 
iff reforms. During the "economic miracle" between 1967 and 
1973, the GDP grew at record rates. Throughout this period, 
trade policy continued to be relatively open in comparison with 
Brazilian policies before or after the economic miracle. 

The steep rise in world oil prices that began in late 1973 
soon ended Brazil's move toward greater trade openness. The 
approximate balance between imports and exports in the early 
1970s became an unprecedented US$4.7 billion deficit in 1974. 
Although record levels of external capital flows financed this 
deficit, Brazilian policy makers responded by restricting 
imports. In June 1974, import financing for many products was 
suspended, while tariff rates on more than 900 items were dou- 
bled. Over the year, restrictions were increased further, and in 
1975 the government required that imports be paid for in 
advance with deposits that did not earn interest or any correc- 
tion for inflation. On the export side, further measures were 
taken to promote exports, especially for manufactures. Despite 
these measures, Brazil's trade balance remained in deficit for 
most of the 1970s. 

The worsening of Brazil's external payments position in the 
early 1980s forced policy makers to turn to other measures to 
attempt to restore external balance, among them adjustment 



234 



The Economy 



in the exchange rate, which was devalued sharply early in 1983. 
Controls on trade were not relaxed, however, and the cessation 
of voluntary lending to Brazil following the Mexican debt crisis 
in 1982 had significant effects on trade policy. Import controls 
that had been introduced in response to the worsening trade 
balance in 1980 were strengthened by centralization of all for- 
eign-exchange transactions in the Central Bank. A negative list, 
which enumerated items whose import was suspended, was 
expanded considerably, and financing for imports was further 
restricted. 

The combination of tightened import controls, real depreci- 
ation, and the fall in domestic demand induced by the restric- 
tive macroeconomic policies of the early 1980s resulted in a 
sharp adjustment in Brazil's external accounts. The magnitude 
of the adjustment appears to have surprised even many of its 
proponents, both in the Brazilian government and among 
creditors. After 1983 the massive trade surpluses averaged 
more than 3 percent of GDP, compared with negative or negli- 
gible levels through most of the 1968-82 period. In 1984, as the 
full effects of the adjustment program were felt, exports were 
about double imports, and Brazil's trade surplus reached an 
unprecedented 6.1 percent of GDP, far exceeding the compa- 
rable shares in other important economies such as Japan (3.5 
percent of GDP) and West Germany (3.8 percent). 

Most of the import controls that were used after 1982 were 
in place well before the cessation of voluntary external lend- 
ing. One of these measures, introduced in 1980 following the 
worsening of the current account, was the financing require- 
ment for specific imports. Another form of import control, 
much used after 1982, was the establishment of formal import 
programs, which were negotiated agreements between import- 
ing firms and the Department of Foreign Trade (Carteira de 
Comercio Exterior — Cacex). These agreements in effect 
turned the import decision into a process that depended more 
on administrative and political considerations than on eco- 
nomic merit. The high degree of administrative control that 
these agreements gave to Cacex created problems, because 
middle-level trade officials acquired extensive control over the 
fortunes of an enterprise through their ability to approve par- 
ticular trade transactions. 

By 1984 it was clear that the successful external adjustment 
had a domestic price, as inflation accelerated to more than 200 
percent at annual rates. Trade policy consequently began to be 



235 



Brazil: A Country Study 

viewed as a potential instrument for internal stabilization, with 
some import liberalization viewed as a potential contributor to 
reduced inflation. 

In late 1984, a number of the direct controls on imports 
were cut back, and the number of products on the negative list 
was reduced substantially. Import financing requirements were 
also relaxed through exemptions, and tariff surcharges were 
replaced by smaller additions to the legal tariff. On the admin- 
istrative side, the Cacex policy of import restrictions for bal- 
ance of payments purposes was reduced. 

In February 1986, following several months in which the 
prices accelerated at an average of more than 500 percent, the 
Sarney government decreed the now infamous Cruzado Plan. 
Although the plan was presented as a definitive program to de- 
index the economy and wipe out inflation, its main thrust was 
to freeze prices. Wages were not frozen and in fact were 
increased by 8 percent when the plan was announced. Foreign 
economic policy in the plan consisted primarily of fixing the 
exchange rate, and no trade policy changes were included in 
the plan. 

The combination of increased domestic real income, a fixed 
nominal exchange rate, and a fall in nominal interest rates 
soon produced a sharp increase in excess demand. In sectors 
less affected by price controls, such as clothing or used automo- 
biles, prices rose sharply. The effects on the trade balance were 
apparent within several months after the plan was decreed. 
The value of monthly exports fell by about 40 percent between 
March and November 1986, and imports rose rapidly begin- 
ning in May. For the year, exports fell by 12.7 percent from 
1985 levels, and imports increased by 5.7 percent. Brazil's 
external payments problems, which had appeared to be largely 
resolved by the record trade balances after 1983, emerged once 
again, as the trade balance fell from US$12.5 billion in 1985 to 
US$8.3 billion in 1986. 

The policy response to the worsening trade balance con- 
sisted of a small 1.8 percent devaluation in October 1986, 
accompanied by administrative tightening of import controls. 
In early 1987, the negative list was once again increased, and 
some of the loss in exchange-rate competitiveness was regained 
with nominal devaluations of the cruzado (for value of the 
cruzado — see Glossary) of 7.8 percent and 8.7 percent in May 
and June of 1987. 



236 



The three-lane Immigrants Highway climbs 700 meters from the 
Atlantic to the plateau in a continuous grade marked by a 
spectacular series of tunnels and bridges. 
Courtesy Inter-American Development Bank, Washington 

Brazil's second price-stabilization attempt, popularly known 
as the Bresser Plan, was announced by the new minister of 
finance, Luiz Carlos Bresser Pereira, in June 1987. In contrast 
to the ill-fated Cruzado Plan, the Bresser Plan did not attempt 
to use external economic policy as an instrument for internal 
stabilization. Brazil returned to its earlier and generally suc- 
cessful "crawling-peg" policy, which consisted of frequent small 
devaluations roughly in line with domestic inflation. The trade 
balance improved with the fall in domestic demand resulting 
from the Bresser Plan, and a current-account balance was 
attained by the end of 1987. 

The improving external payments situation permitted some 
modest liberalization, beginning with a reduction of the nega- 
tive list in September 1987. Import financing requirements 
were once again relaxed, and in late 1988 Cacex announced an 
expansion of import program levels for 1989. The 1988 
reforms also simplified the existing tariff system. Average rates 
were lowered from over 50 percent to about 40 percent. More- 
over, the dispersion or variability of rates was reduced; the 



237 



Brazil: A Country Study 

highest tariffs were brought down from 105 to 85 percent, and 
the number of different rates was reduced from twenty-nine to 
eighteen. The reforms further simplified the tariff system by 
consolidating the rules covering import transactions, reducing 
the number of agencies directly involved in the approval of 
trade transactions, and establishing greater automaticity in the 
approval process. 

The contrast between the favorable external payments situa- 
tion and Brazil's internal deficit became even more marked in 
1988, as export value increased to record levels. The favorable 
external situation permitted a continuation of import liberal- 
ization. In August 1988, Cacex permitted firms to exceed con- 
siderably their programmed imports of capital and 
intermediate goods. Despite this modest relaxation of import 
policy, there was no noticeable increase in total imports, which 
actually fell slightly in 1988 from their 1987 level. 

In January 1989, the government announced the Summer 
Plan, which temporarily froze wages and the exchange rate. 
Despite the announcement of further fiscal tightening, expen- 
ditures declined little and the budget deficit worsened as a 
result of freezing prices for public-sector services. By mid-1989 
most other prices were rising at more than 30 percent per 
month, ending the year with a monthly rate of about 50 per- 
cent. Imports began to increase significantly in mid-1989, and 
Brazil's 1989 trade surplus was US$16.1 billion, well below the 
record US$19.2 billion of the preceding year. Although some 
of the increase in the level of imports may be attributable to 
the modest loosening of some import controls in the preced- 
ing year, major factors behind the worsening trade balance 
were the recovery of industrial activity and increasing overvalu- 
ation of the new cruzado (cruzado novo). In late 1989, the Cus- 
toms Policy Council (Conselho para Politica Aduaneira — CPA) 
issued Resolution 1,666, which further cut tariffs. The effect of 
this change was to reduce the average legal tariff from 41 to 
35.5 percent. Many of the changes occurred in sectors that had 
formerly enjoyed high levels of protection, among them elec- 
trical equipment, some capital goods, and chemicals (see table 
16, Appendix). 

At the end of the Sarney government, inflation rates were at 
the threshold of hyperinflation, with the monthly rates in the 
first two months of 1990 at over 70 percent. Although the trade 
balance had fallen to about a third of the levels of the preced- 
ing year, Brazilian policy makers were clearly focused on inter- 



238 



The Economy 



nal stabilization; trade policy reform was a recognized but 
secondary goal. 

Collor de Mello succeeded Sarney in March 1990. During 
the election campaign, Collor de Mello had successfully por- 
trayed himself as an opponent of an intrusive, interventionist 
bureaucracy. His rhetoric, which included attacks on corrup- 
tion and highly paid officials (marajds), emphasized deregula- 
tion and greater openness to world markets. The consequences 
of this political and ideological change for Brazilian trade pol- 
icy were not long in coming. One of Collor de Mello's early 
moves was to abolish Cacex, by that time the subject of wide- 
spread criticism and frequent allegations of corruption by the 
business community. The Technical Coordinating Office for 
Trade (Coordenadoria Tecnica de Intercambio Comercial — 
CTIC), a slimmer and less powerful agency under the Ministry 
of Economy, Finance, and Planning, took over the Cacex's 
functions. 

Although import licenses were not abolished, their approval 
became a relatively routine operation, and by 1991 most 
licenses were being issued within five working days. The CTIC 
became primarily a reporting and registration agency, which 
had little of the discretionary power formerly exercised by 
Cacex. The former CPA, which had been far overshadowed by 
Cacex, was replaced by an agency coequal with the CTIC, the 
Technical Coordinating Office for Tariffs (Coordenadoria Tec- 
nica de Tarifas — CTT) . With the shift in emphasis in trade pol- 
icy from discretionary administrative control to the 
automaticity of published tariffs, many of them limited by Bra- 
zil's treaty commitments, the CTT's role in formulating import 
policy became significantly greater than the CPAs had been. 

Early in 1991, the Collor de Mello government announced a 
series of tariff reductions to be phased in over the 1991-94 
period. These were among the most far-reaching and signifi- 
cant reductions in Brazilian trade protection in several 
decades. Earlier tariff reductions often had been largely cos- 
metic, only reducing rates that were prohibitive to high levels 
that still barred many imports. The 1991 reforms went much 
further, and in many sectors reduced rates to about a third of 
their level in the early 1980s. Equally important, the reforms 
reduced the wide variability or dispersion of tariff rates that 
were once characteristic of Brazilian trade policy. The overall 
trend in Brazilian trade policy is clear. By the mid-1990s, Brazil 



239 



Brazil: A Country Study 

had become a much more open economy than it had been a 
decade earlier. 

Trade Patterns and Regional Economic Integration 

Underlying much of the debate over trade policy in Brazil in 
the 1990s is an implicit choice between regional trade arrange- 
ments or a more nonpreferential policy that would not discrim- 
inate by national origin or destination. Brazil's most important 
current regional trade initiative is the Common Market of the 
South (Mercado Comum do Sul — Mercosul; see Glossary). 
With the ratification of the North American Free Trade Agree- 
ment (NAFTA; see Glossary) among Canada, Mexico, and the 
United States in 1993, it was inevitable that Brazilian participa- 
tion in even larger regional trade arrangements than Mercosul 
would be discussed increasingly. 

Despite the rhetorical prominence of Latin American trade 
in debate over Brazilian trade policies, Brazilian trade flows do 
not reflect a particularly strong orientation to other Latin 
American countries. However, with Mercosul, other Latin 
American countries may gain in relative importance. By the 
mid-1990s, trade with the other Mercosul partners, particularly 
Argentina, was one of the most rapidly growing sectors of Bra- 
zilian foreign trade. 

In the 1980s, Brazilian exports to the rest of South America 
had averaged less than 10 percent of all exports; exports to 
Mexico, Central America, and the Caribbean added another 2 
percent. Brazilian exports were directed overwhelmingly to the 
United States and Canada (about 30 percent) and to Western 
Europe (about 30 percent). 

Brazilian export patterns in the 1980s and early 1990s were 
little different from earlier decades, when they were also domi- 
nated by trade with the United States and with Europe. This 
trade orientation reflected several historical influences, includ- 
ing the structure of Brazilian international transportation 
channels and the composition of Brazilian exports. Only in the 
1970s did Brazilian exports shift from being dominated by pri- 
mary and semiprocessed products to manufactures. Major mar- 
kets for all these products were primarily in high-income 
countries; for example, Brazil long depended on the United 
States as its major market for coffee. Other important primary 
products, such as sugar, soybeans, and iron ore, were also sold 
mainly in high-income countries (see table 17, Appendix). 



240 



The Economy 



Finally, and possibly most important, Brazilian export pat- 
terns reflected the relatively strong inward orientation of most 
of Brazil's Latin American trade partners during most of the 
early post-World War II decades. The strong influence of the 
import-substitution industrialization doctrines of the Eco- 
nomic Commission for Latin America and the Caribbean 
(ECLAC; see Glossary) in most of the Latin American econo- 
mies in the 1950s had by the early 1960s led to extensive 
import-substitution industrialization, particularly in Brazil and 
its larger trading partners, notably Argentina and Mexico. The 
inevitable result was that the more open economies of Europe 
and North America continued to provide the most important 
markets for Brazilian exports. Only with the concurrent liberal- 
ization of trade in a number of other Latin American econo- 
mies, especially Argentina, did Brazil's exports begin to reflect 
the importance of its Latin American trade partners. 

Brazil's export orientation toward North America and 
Europe is also noticeable in its import pattern. In addition, the 
Middle East is a significant trade partner because of the high 
value of petroleum imports. The large trade deficit with this 
region was financed primarily by surpluses with other regions, 
notably the United States and Europe. Brazil's imports from 
the rest of Latin America accounted for only about 12 percent 
of the total value of its imports in the 1980s. 

Despite the approximately equal shares of Latin American 
trade in both Brazil's exports and its imports, during most of 
the 1980s Brazil had a large trade surplus with the region, 
exceeding US$800 million in most years. This surplus, which 
was generated primarily in trade with Argentina, Bolivia, and 
Paraguay, helped finance Brazil's oil imports from two of the 
region's oil exporters, Mexico and Venezuela. The value of Bra- 
zilian imports of petroleum from these countries was greatest 
in the early 1980s and declined with the fall in petroleum 
prices. 

Brazilian attempts to expand formal regional trade agree- 
ments beyond bilateral preferential trading arrangements date 
from 1958, when the government joined Argentina, Chile, and 
Uruguay in discussions that led to the Treaty of Montevideo, 
signed in February 1960. Under the treaty, which was 
expanded subsequently to most of the economies of South 
America and to Mexico, the members agreed to negotiate 
mutual tariff reductions on a permanent basis. 



241 



Brazil: A Country Study 

Despite its professed intentions, the organization created by 
the treaty, the Latin American Free Trade Association 
(LAFTA — also known as Asociacion Latinoamericana de Libre 
Comercio — ALALC; see Glossary) was only a limited success. 
Part of the reason lay in the departures of many of the agree- 
ments from the nondiscriminatory provisions of Article 24 of 
the General Agreement on Tariffs and Trade (GATT — see 
Glossary), which regulates regional trade agreements. 
Although the intent of LAFTA was to create new trade rather 
than to divert trade flows from efficient sources outside the 
region, its success in this respect was minimal. Another provi- 
sion of the agreement, which required the formation of a free- 
trade area within a specified time period, was ignored. The 
deadline for LAFTA to create such an area was first extended 
from 1972 to 1980; when the 1980 deadline was not met, 
LAFTA was replaced by the Latin American Integration Associ- 
ation (LAIA — also known as Associacao Latino-Americana de 
Integracao — ALADI), which had more modest goals. The real 
blow to LAFTA/ ALADI trade came after 1982, when interna- 
tional capital markets were closed to most Latin American bor- 
rowers following the onset of Mexico's external debt crisis. Like 
most Latin American governments, Brazil reacted by sharply 
restricting its imports, including those from other ALADI 
members. As a result, intraregional trade fell significantly in 
the first half of the 1980s. 

Argentina historically has been Brazil's most important Latin 
American trade partner by a wide margin, both in imports 
from Brazil and exports to it. For this reason, virtually all Brazil- 
ian regional trade initiatives have been based on this bilateral 
trade relationship. Well behind, and of comparable impor- 
tance, are Chile, Mexico, and Venezuela. One feature of Bra- 
zil's regional trade is the substantial surpluses that it has run 
with several of its neighbors, among them Bolivia, Colombia, 
and Paraguay. In the case of Paraguay, this surplus may reflect 
an underreporting of imports as a result of the high value of 
contraband and unreported consumer good imports from Par- 
aguay to Brazil. Another prominent feature of Brazil's trade 
with the rest of Latin America is the importance of imports 
from the temperate-zone Southern Cone countries. With the 
exception of the oil exporters, Brazilian imports from other 
tropical Latin American economies are relatively unimportant, 
despite the importance of several of them as markets for Brazil- 
ian exports. 



242 



A widened and paved section of Highway BR-367 108 kilometers 
north of Diamantina, Minas Gerais State, traverses plantations of 
eucalyptus trees, grown to produce charcoal for Minas Gerais iron 

and steel mills. 

Courtesy Inter-American Development Bank, Washington 

During the 1970s, Brazil's trade with the United States, his- 
torically its most important trade partner, declined in relative 
importance as trade with Western Europe and Japan grew On 
the export side, this trend ended in the early 1980s, as the 
United States economy grew more rapidly than Europe's and 
the real appreciation of the dollar made the United States a rel- 
atively more attractive market in which to sell. The tendency 
toward a greater trade surplus was reinforced by Brazil's efforts 
after 1982 to restrict imports, especially from traditional suppli- 
ers like the United States. 

Brazil's export-led growth (see Glossary) since the 1980s has 
been oriented decidedly toward the industrialized countries. 
As a result of their already large share of Brazil's export market 
and their rates of growth, the United States and Canada were 
responsible for nearly half of Brazil's export growth during the 
late 1980s and early 1990s. Brazil's most rapidly growing market 
in the period was the rest of South America, with annual 
growth exceeding 10 percent. However, its relatively modest 
initial share of the Brazilian export market placed South Amer- 



243 



Brazil: A Country Study 

ica behind Asia and the Pacific and Western Europe, as well as 
the United States and Canada, in its contribution to total Bra- 
zilian export growth. 

Brazilian import growth in the 1980s and early 1990s pre- 
sents a similar picture. The total value of Brazilian imports in 
this period grew very slowly, as the decline in the value of oil 
imports nearly offset the rise in the value of imports from West- 
ern Europe and North America. As was the case with exports, 
the industrialized countries were far more important trade 
partners for Brazil than were the less developed regions. Brazil- 
ian imports from other Latin American trade partners fell in 
value after 1983, as modest increases in imports from the rest 
of South America and the Caribbean were more than offset by 
the fall in imports from Mexico and Central America. 

Until the early 1990s, both Brazil and Argentina had a tradi- 
tion of inward-oriented industrial policy, and it is therefore not 
surprising that trade between the two economies fell far short 
of its probable potential. The 1986 trade agreement between 
Brazil and Argentina was a partial attempt to address this prob- 
lem and formed the nucleus of the regional trade agreement 
for Mercosul. 

President Sarney and Argentina's Raul Alfonsin (president, 
1985-89) signed twelve protocols in July 1986 and additional 
protocols in December 1986. Most of the protocols aimed at 
strengthening Argentine-Brazilian economic cooperation, 
although cooperation in other areas also was included. In 
November 1988, following extensive consultations between the 
two governments, Alfonsin and Sarney signed the final Argen- 
tine-Brazilian Agreement, which was ratified subsequently with- 
out modification by the congresses of the two countries in 
August 1989. 

Both governments hailed the agreements as major steps 
toward economic integration, as well as a Latin American 
response to what was perceived as the formation of economic 
blocs, such as the plans of the United States-Canada Free Trade 
Agreement (FTA) and the European Community (EC; see 
Glossary). In reality, the protocols were more statements of 
intention than the detailed results of negotiations in the areas 
covered. The Argentine-Brazilian Agreement was a short, five- 
page general statement summarizing the objectives of the July 
1986 protocols. Unlike the massive United States-Canada FTA, 
it in effect deferred much of the specific negotiation involved 
in the agreement's implementation to the future. It was never- 



244 



The Economy 



theless an ambitious document, appearing to promise a level of 
cooperation and coordination analogous to that of the EC. 

The Argentine-Brazilian protocols signed between 1986 and 
1988 paved the way for an even more ambitious regional trade 
agreement. Following negotiations with Uruguay and Para- 
guay, the foreign ministers of the respective governments 
agreed in March 1991 in Asuncion, Paraguay, to establish a 
common market among the four countries by the end of 1994; 
the Treaty of Asuncion, which established Mercosul, explicitly 
recognized the potential participation of additional members. 
Like the earlier bilateral Argentine-Brazilian agreements, the 
1991 Mercosul agreements were long on promises and left 
much for future negotiations. The agreements envisioned a 
full common market. Article 1 of the treaty provides for free 
circulation of goods, services, and factors of production (see 
Glossary) among the member countries; elimination of tariff 
and nontariff barriers; establishment of a common external 
tariff; coordination of policies in regional and international 
forums; and coordination of macroeconomic and sectoral poli- 
cies. 

During the transition period from 1991 through 1994, the 
accord called for a progressive "linear and automatic" reduc- 
tion in tariffs, which was to be accompanied by the elimination 
of nontariff barriers to trade among the contracting parties. 
The December 31, 1994, target was to be a zero tariff among 
the members. As more recent entrants, Paraguay and Uruguay 
were given an additional year to comply with the terms of the 
treaty. 

Compared with some earlier declarations of intent, the 
Treaty of Asuncion was considerably more specific about how 
the common market was to be created. A schedule for tariff 
reductions was established; cuts were to be made at six-month 
intervals between June 30, 1991, and December 31, 1994. 
These reductions were to be calculated as a percentage of the 
lowest tariffs applied to members outside the Mercosul group 
and were based on the ALADI tariff classification. 

Several other provisions of the treaty give it a positive bias 
toward greater economic openness. Tariff reductions are based 
on the rates prevailing before the signing of the treaty. Any 
external tariff reductions that lower the base from which intra- 
Mercosul tariffs are calculated was to apply to all signatories. 
The treaty also contains a type of "most-favored-nation" clause, 
which guarantees that any trade concession extended to non- 



245 



Brazil: A Country Study 

members of Mercosul by any member will be extended auto- 
matically by all other contracting members. 

The Treaty of Asuncion allowed each nation to submit a list 
of exceptions to the tariff reduction list. Brazil and Argentina 
submitted 324 and 394 tariff exceptions, respectively; Paraguay, 
allowed 439; and Uruguay, 960. Although it is impossible to 
quantify the degree to which these exemptions undercut the 
main thrust of the treaty, their most important feature was that 
they were temporary. Argentina and Brazil agreed to reduce 
their exception list by 20 percent annually, while Paraguay and 
Uruguay were allowed an extra year (to the end of 1995) to 
eliminate their lists. 

Brazil and many of its neighbors have tended to view Brazil- 
ian trade preference options as geographically defined and rel- 
atively local. Whatever the outcome of the Mercosul regional 
initiative, the existing pattern of Brazilian trade flows suggests 
that Brazil's long-term trade interests extend well beyond such 
regional boundaries. Indeed, Mercosul and the European 
Union (EU, the former EC; see Glossary) have been discussing 
the creation of a free-trade area between the two groups. Two 
alternatives to Brazil's South American-focused regional trade 
policy are participation in a hemispheric FTA or more open, 
nonpreferential trade with the entire world. The former would 
follow the Mexican example by negotiating Brazil's entrance 
into the NAFTA, which is composed of the United States, Can- 
ada, Mexico, and potentially, Chile. The second strategy is to 
follow a Chilean approach, avoiding preferential trade liberal- 
ization and making Brazil more open to all trade flows, what- 
ever their geographical source. 

Compared with membership in an expanded NAFTA, Brazil- 
ian participation in Mercosul represents a much more modest 
regional trade arrangement. Canada alone has a larger GDP 
than do all of the Mercosul economies combined; the four 
Southern Cone members have a combined GDP totaling less 
than 10 percent of the total GDP of the NAFTA countries. 
Given recent rates of economic growth, this gap has actually 
widened in recent years. 

The great disparity in the sizes of the two regional trade 
groups has a number of implications for alternative Brazilian 
trade strategies. Membership in the current group, in which 
Brazil is by far the dominant economy, offers political influ- 
ence and the possibility of shaping many of Mercosul's external 
commercial policies to match Brazilian trade objectives. In 



246 



The Economy 



many manufacturing areas, Brazil faces little competition from 
the other Mercosul countries. If Brazil were to become a mem- 
ber of the larger hemispheric trade group (NAFTA), the coun- 
try would account for only about 5 percent of the association's 
joint product. 

In addition to the size difference between Mercosul and a 
hemispheric FTA, other features of the two regional trade 
arrangements have important cost and benefit implications for 
Brazil. The Treaty of Asuncion is in many ways more ambitious 
than is NAFTA. Its stated objective is the creation of a true com- 
mon market similar to the EU. In such a regional trade 
arrangement, trade barriers among the member countries are 
eliminated and external tariffs against third countries, fiscal 
policies, and exchange-rate policies are integrated. 

Brazilian participation in a hemispheric FTA would in prin- 
ciple require less coordination of fiscal, monetary, exchange- 
rate, and foreign capital policy than is required by the Treaty of 
Asuncion. One may question how seriously the Brazilian gov- 
ernment or other Mercosul members are prepared to imple- 
ment the integration implied by a common market. The 
replacement of LAFTA by ALADI in 1980 suggests that in the 
choice between national sovereignty and the benefits of greater 
economic integration, the former may prevail. But, if the 
explicit commitments of the four governments in the Treaty of 
Asuncion are to be taken at face value, it would appear that a 
relatively high degree of policy independence would be sacri- 
ficed for economic integration benefits, which are likely to be 
considerably more modest than those attainable by member- 
ship in a hemispheric FTA. 

Another option for Brazil would be to follow a Chilean 
approach of greater trade openness on a nonpreferential basis. 
Such an approach has three main advantages, which in princi- 
ple make it superior to other trade strategies. First, the possibil- 
ity that inefficient trade diversion will occur is eliminated. The 
lowest cost or most efficient producers would be able to supply 
Brazil without facing trade barriers, because no such producer 
would be eliminated from among Brazil's potential suppliers 
under a nonpreferential open-trade policy. Brazilian demand 
would thus be supplied by the most efficient suppliers in the 
world market, rather than those in a more restricted area. 

Second, a nonpreferential approach in Brazilian trade policy 
would be more easily administered because it is in effect a uni- 
lateral policy, not dependent on negotiations with potential 



247 



Brazil: A Country Study 

trade partners. However, this approach may not be perceived as 
an advantage from a political standpoint, as it appears to sacri- 
fice Brazil's "bargaining chips." 

Third, a nonpreferential strategy may better position Brazil 
to respond to changes in world markets. Until the mid-1990s, 
Brazilian trade had not grown faster in the Mercosul region 
than in other areas. In fact, the United States, Canada, Western 
Europe, and Asia all contributed more to the growth of Brazil- 
ian trade until the mid-1990s than did other Latin American 
economies. Although Brazilian membership in a hemispheric 
FTA might ensure greater access to the United States, Canada, 
and Mexico, it would offer little prospect of trade expansion 
with Europe or Asia. 

Economic Outlook 

Brazil entered the 1990s with much less confidence about its 
economic future than it once had. The economic stagnation 
and uncertainty of the 1980s had exacted a high toll, and per 
capita income in 1990 was no higher than it was in 1980. Infla- 
tion, at monthly rates, was over 30 percent, unprecedented 
even by Brazilian standards. It is reasonable therefore to ask 
what has been learned from the experience of the 1980s and 
what are the prospects for an economic future brighter than 
the recent past. 

As an object lesson, the economic experience of the 1980s 
made a contribution. Government is much less likely to be seen 
as a solution, and many more Brazilians see the public sector as 
the problem. The rather tiresome debate between the mone- 
tarists and the structuralists that dominated discussions of infla- 
tion in thel970s has been superseded by a recognition that 
money supply growth does indeed have a close relation to infla- 
tion, but that the underlying problem is the fiscal deficit that 
drives the money supply process. Although the monetization of 
deficits may be postponed, as was sometimes done in the 1980s, 
the inflationary consequences of public-sector financial imbal- 
ance cannot be avoided indefinitely. A part of the economic 
disorder of the 1980s was the consequence of populist attempts 
to ignore this point. 

The external shocks of the 1980s have also shown Brazilians 
that their country cannot be isolated from the rest of the 
world. By the early 1990s, Brazil was on the path to becoming 
more open to trade than it had been for several decades. 
Despite the loss of Brazilian access to world capital markets in 



248 



Copacabana Beach, Rio de Janeiro 
Courtesy Larry Buzard 

the early 1980s, external capital was beginning to return to Bra- 
zil by the early 1990s. In contrast to the massive capital flows of 
the 1970s, much of which financed public borrowing, capital 
flows in the 1990s focused more on the private sector. 

Brazilians also learned that price stabilization is not easy and 
that "magic" solutions centered on price freezes do not work 
without the more difficult fiscal adjustments that emerge from 
a political consensus. That consensus had not been developed 
by the early 1990s, even though political leaders and econo- 
mists recognized that fiscal adjustment was essential for macro- 
economic stability. The failure of successive stabilization plans 
that ignored the underlying fiscal disequilibrium also imposed 
long-term costs, because the credibility of government eco- 
nomic policies was undermined. The fall of the Collor de 
Mello government in 1992 under charges of massive corrup- 
tion and the economically unrealistic provisions of the 1988 
constitution have made the task of regaining government cred- 
ibility even more difficult. 

For Brazil to return to the kind of economic growth that 
many of its people once regarded as their birthright, a number 
of changes must occur. First, the public-sector deficit must be 



249 



Brazil: A Country Study 

reduced substantially. This can be done in a number of ways 
without imposing heavy costs on Brazilian society. Privatization 
of economically inefficient state enterprises is one way, and in 
the first half of the 1990s some progress was made in this area. 
The complex system of tax and credit subsidies that was devel- 
oped in preceding decades offers many opportunities for effi- 
ciency-improving reform, which would also contribute 
substantially to reduction of the fiscal deficit. 

Second, Brazil's recent moves toward becoming a more open 
economy offer the prospect of increasing economic efficiency 
and ensuring that new resources flow into activities in which 
Brazil has a strong international competitive position. Decades 
of protectionism in a number of key sectors have imposed high 
costs on Brazilian consumers. Greater openness to world mar- 
kets, either through regional trade initiatives or through unilat- 
eral reductions in trade restrictions, will make a noticeable 
contribution to Brazilian economic welfare. 

Finally, Brazil could become an economically prosperous 
country if it can seriously address the enormous inequities in 
income distribution. Serious efforts to help Brazil's least privi- 
leged must focus on the provision of basic services and, above 
all, on education. Without substantial efforts to address the 
income distribution problem, the strains on the political sys- 
tem that have their economic counterpart in fiscal disequilib- 
rium may make the country much harder to govern and may 
reduce the prospects for a successful and sustainable price sta- 
bilization. 

* * * 

A highly regarded analysis of the Brazilian economy's formu- 
lation from the early colonial period to the breakdown of the 
coffee economy in the 1930s is in Celso Furtado's The Economic 
Growth of Brazil. A succession of external shocks, failed stabiliza- 
tion plans, and significant changes in trade policy in the 1980s 
and early 1990s provided the raw material for literature on 
recent Brazilian economic problems. A classical treatment of 
the 1980s is Werner Baer's The* Brazilian Economy — Its Growth 
and Development, the fourth edition of which was published in 
1995. Some of the difficulties in the transition from a primary 
product economy to an important industrial power are exam- 
ined in Edmar L. Bacha and Herbert S. Klein's Social Change in 
Brazil, 1945-1985. A parallel treatment of some of these prob- 



250 



The Economy 



lems in Brazilian economic development is given in Luiz Carlos 
Bresser Pereira's Development and Crisis in Brazil, 1930-1983. 

Brazil's economic response to the external debt crisis of the 
early 1980s is the subject of various studies, several of them 
parts of larger studies on a number of developing nations. One 
is Eliana A. Cardoso and Albert Fishlow's The Macroeconomics of 
the Brazilian External Debt Donald V. Coes's Macroeconomic Crises, 
Policies, and Growth in Brazil, 1 964-90 provides a detailed mac- 
roeconomic history of post-1964 policies and their conse- 
quences. An earlier treatment on Brazil's experience is James 
Dinsmoor's Brazil: Responses to the Debt Crisis. A former minister 
of finance, Marcilio Marques Moreira, provides an insider's 
view of the external debt problem in The Brazilian Quandary. 

William G. Tyler's Manufactured Export Expansion and Industri- 
alization in Brazil and Werner Baer's Industrialization and Eco- 
nomic Development in Brazil examine a number of the causes and 
consequences of import-substitution industrialization. A World 
Bank-sponsored study by Coes, Liberalizing Foreign Trade: Brazil, 
examines Brazil's trade policies between 1964 and the early 
1980s. Changes in Brazil's capital markets in this period are the 
subject of John H. Welch's Capital Markets in the Development Pro- 
cess. Samuel A. Morley examines Brazilian labor markets and 
income distribution in Labor Markets and Inequitable Growth: The 
Case of Authoritarian Capitalism in Brazil. Thomas J. Trebat stud- 
ies the role of state enterprises in Brazil's State-Owned Enterprises. 

Among the useful sources on the Brazilian economy and its 
development that are available only in Portuguese are A ordem 
do progesso, edited by Marcelo de Pair a Abreu. Numerous works 
in Portuguese discuss Brazilian inflation and the various 
attempts to deal with it. Ignacio Rangel's A inflacdo brasileira is a 
classic work. Contemporary treatments of stabilization 
attempts include Piano Cruzado by Fernando de Holanda and 
Mario Henrique Simonsen, the latter a former finance minis- 
ter. 

Data on the Brazilian economy are available from a number 
of sources, including various Brazilian economic journals, 
many of high quality. Revista Brasileira de Economia, edited by 
the Fundacao Getulio Vargas in Rio de Janeiro, is Brazil's oldest 
and perhaps most conservative economic journal. Estudos 
Econdmicos, edited by the Economic School of the University of 
Sao Paulo, is an eclectic journal. Pesquisa e Plane] amento 
Economico, which emphasizes academic articles dealing with 
current problems of the Brazilian economy, is published by the 



251 



Brazil: A Country Study 

National Research Institute (Instituto Nacional de Pesquisa — 
INPES) and the Applied Economic Research Institute (Insti- 
tuto de Pesquisa Economica Aplicada — IPEA), a semi-indepen- 
dent research organization of the Ministry of Planning, based 
in Rio de Janeiro. Revista de Economia Politico, is a critical but 
widely respected economic journal edited by the Center for 
Political Economy of Sao Paulo. An interesting economic jour- 
nalism magazine is the monthly Conjuntura Economica, pub- 
lished by the Fundacao Getulio Vargas. It presents short articles 
on trends in the Brazilian economy and has a rich statistical 
compendium. 

A long view is provided in Estatisticas historicas do Brasil: Series 
economicas, demogrdficas e sociais, 1550 a 1988, published by the 
Brazilian Institute of Geography and Statistics (Fundacao Insti- 
tuto Brasileiro de Geografia e Estatfstica — IBGE). The IBGE 
yearbook, Anudrio estatistico do Brasil, provides a wealth of data 
on all aspects of the economy, albeit with a lag of several years. 
The Boletim do Banco Central is a valuable source of macroeco- 
nomic and financial data. A rich source of studies on the Brazil- 
ian economy is in a series of publications by INPES-IPEA called 
Perspectivas da economia brasileira. Dealing with virtually all 
aspects of the Brazilian economy, the volumes, issued at two- to 
three-year intervals, not only review recent events but also per- 
form projections for the near future. Among the sources avail- 
able in English are the periodic studies published by the British 
Economist Intelligence Unit and the statistical series by the 
IMF published for all member countries. The World Bank pro- 
vides a number of summary statistics in its annual World Develop- 
ment Report and is also the source of a wealth of more detailed 
statistical information, both published and unpublished, on 
contemporary Brazil. (For further information and complete 
citations, see Bibliography.) 



252 



Chapter 4. Government and Politics 



A nineteenth-century wood carving made by an indigenous Brazilian tribe, 
from Hjalmar Stolpe, Amazon Indian Designs from Brazilian and Gui- 
anan Wood Carvings 



BRAZIL'S POLITICAL EVOLUTION from monarchy to de- 
mocracy has not been smooth. Following independence in 
1822, Brazil, unlike its South American neighbors, adopted 
constitutional monarchy as its form of government. The new 
nation retained a slave-based, plantation economy, and politi- 
cal participation remained very limited. After the coronation 
of Dom Pedro II (emperor, 1840-89) in 1840, a two-party sys- 
tem based on the British model — with conservative and liberal 
parties and frequent cabinet turnovers — evolved. Within this 
centralized unitary system, the emperor appointed the gover- 
nors, using his prerogatives under the moderating power (poder 
moderador — see Glossary) granted by the 1824 constitution, and 
legislative elections were indirect. Brazil enjoyed considerable 
political stability until the 1880s, when the system proved inca- 
pable of accommodating military demands and pressure to 
emancipate slaves. 

Brazil patterned the constitution of what is now called the 
Old Republic (1889-1930) on the United States constitution. 
However, colonelism (coronelismo — see Glossary), a political sys- 
tem based on economic power by large landowners in rural 
areas, persisted. Under the new constitution of February 24, 
1891, the president, National Congress (Congresso Nacional; 
hereafter, Congress), state governors and legislatures, and local 
officials were chosen through direct elections. 

Following World War I, when Brazil began to undergo rural- 
urban and agricultural-industrial transformations, its political 
system again was unable to cope with the demands of the urban 
middle classes and especially the working classes. The 1929 
stock market crash further exacerbated the volatile situation, 
and elites from the states of Rio Grande do Sul and Minas 
Gerais staged a preemptive revolution and deposed the old 
regime. As a result of the revolts of 1930, Getulio Dorneles Var- 
gas became president (1930-1945, 1951- 54). 

Violent clashes over conflicting ideologies of the left and the 
right erupted in the streets of Brazil's major cities in the 1930s. 
Vargas tried to strike a balance between the demands of labor 
and capital following Italian dictator Benito Mussolini's Carta 
di Lavoro (see Glossary) model established in the 1920s. The 
1934 constitution incorporated this model and thus began the 
politics of corporatism (see Glossary) in Brazil. In close cooper- 



255 



Brazil: A Country Study 



ation with the military, Vargas pushed for import-substitution 
industrialization (see Glossary) and a reduction of military 
forces under the command of state governments, in favor of 
the Brazilian Armed Forces (Forcas Armadas Brasileiras). Pres- 
ident Vargas closed Congress in 1937 and ruled as a dictator 
until 1945. 

The 1945-64 period is known for its multiparty democratic 
politics, and four presidents were elected freely in 1945, 1950, 
1955, and 1960. In the early 1960s, an explosive combination of 
slower economic growth, rising inflation, populism, and 
nationalism produced political instability and popular discon- 
tent. The major political parties lost their hegemony, and labor 
unions accumulated great political influence over the govern- 
ment of Joao Goulart (president, 1961-64). 

The military seized power in April 1964 and began twenty- 
one years of rule. Under its model of "relative democracy," 
Congress remained open, but with greatly reduced powers. 
Regular elections were held for Congress, state assemblies, and 
local offices. However, presidential, gubernatorial, and some 
mayoral elections became indirect. Political parties were 
allowed to operate, but with two forced realignments. These 
were the replacement of the old multiparty system with a two- 
party system in 1965 and a system of moderate pluralism, with 
six (and later five) parties in 1980. The military regime 
employed massive repression from 1969 through 1974. 

After the "economic miracle" period (1967-74), Brazil 
entered a "stagflation" phase concurrent with political liberal- 
ization. During the military period, Brazilian society had 
become 70 percent urban; the economy had become industri- 
alized, and more manufactured goods than primary goods 
were exported; and about 55 percent of the population had 
registered to vote. Foreign policy oscillated between alignment 
with the United States and pragmatic independence. A transi- 
tion to a civilian president took place in 1985. From 1985 to 
1997, Brazil experienced four distinct political models: a 
return to the pre-1964 tradition of political bargaining, clien- 
telism (see Glossary), and economic nationalism under Jose 
Sarney (president, 1985-90); neosocial liberalism with eco- 
nomic modernization under Fernando Collor de Mello (presi- 
dent, 1990-92); an erratic personal style of social nationalism 
under Itamar Franco (president, 1992-94); and a consensus- 
style social-democratic and neoliberal coalition under 
Fernando Henrique Cardoso (president, 1995- ). 



256 



Government and Politics 



Under heavy accusations of corruption, President Collor was 
impeached in 1992. His vice president, Franco, used a prag- 
matic policy of "muddling through," but in mid-1994 achieved 
great popularity with the i?m/Plan (for value of the real (R$) — 
see Glossary), a stabilization program authored by then Minis- 
ter of Finance Cardoso. In the 1994 election, Cardoso and the 
Brazilian Social Democracy Party (Partido da Social Democra- 
cia Brasileira — PSDB) expounded a social-democratic model of 
modernization, while Luis Inacio "Lula" da Silva of the Work- 
ers' Party (Partido dos Trabalhadores — PT) supported a 
reworked model of corporatist or syndicalist socialism. The 
Real Plan was instrumental in the election of Cardoso as presi- 
dent. 

Cardoso was inaugurated as president on January 1, 1995. 
The transition to the new government was nearly perfect. Car- 
doso had won an outright victory in the first-round election. 
He had potentially strong support blocs in the Chamber of 
Deputies (Camara dos Deputados) and Federal Senate 
(Senado Federal; hereafter, Senate). He had strong support 
from a majority of the newly elected governors, including those 
from the important states of Minas Gerais, Sao Paulo, and Rio 
de Janeiro, which elected governors from the president's own 
PSDB. Moreover, the December 1994 inflation rate was less 
than 1 percent; unemployment was low; and popular expecta- 
tions were extremely high. 

Perhaps the most important task of the Cardoso government 
in 1995 was to promote the reform of key sections of the 1988 
constitution in order to reduce the role of the state in the econ- 
omy, reform the federal bureaucracy, reorganize the social 
security system, rework federalist relationships, overhaul the 
complicated tax system, and effect electoral and party reforms 
to strengthen the representation of political parties. The new 
Cardoso government initiated constitutional reform (which 
requires a three-fifths majority of each house), but soon met 
with stiff congressional resistance. Because of the 1996 munici- 
pal elections and other political impediments, the other 
reforms — administrative, social security, and fiscal — were 
stalled in Congress, awaiting passage in 1997. 

Political Culture 

Many aspects of Brazil's political system may be explained by 
its political culture (see Glossary), the origins of which may be 
found in traditional rural society during the colonial and inde- 



257 



Brazil: A Country Study 

pendence periods through 1930. This political culture evolved 
into three styles of politics. Under the more traditional style of 
politics, coronelismo, the local coronel (colonel), in alliance with 
other large farmers, controlled the votes of rural workers and 
their families. The local political chiefs in turn exchanged 
votes with politicians at the state level in return for political 
appointments and public works in their municipalities (munia- 
pios) . 

As rural-urban migration increased after 1930, a transitional 
style of clientelistic politics emerged in medium-size and large- 
size cities. Under this system, neighborhood representatives of 
urban politicians would help recent migrants resolve their 
problems in exchange for votes. These representatives were 
usually from "clientele professions," such as medical doctors, 
dentists, and pharmacists. 

The third style of mass politics involved a direct populist 
appeal to the voter by the politician, without formal intermedi- 
ation by clientelism or domination by toronelismo. Research in 
the early 1990s revealed that in most cases voter decision mak- 
ing has been influenced by a mixture of the second and third 
styles, as well as by peer groups, opinion leaders, and television 
soap operas (telenovelas) . 

Polling results since the early 1970s have revealed changing 
public opinion concerning the relative merits of military gov- 
ernment versus democracy. For example, the proportion of 
Brazilians favorable to military government decreased from 79 
percent in 1972 to 36 percent in 1990. Moreover, 70 percent of 
Brazilians agreed in 1990 that the government should not use 
troops against striking workers, as compared with only 7 per- 
cent in 1972. In a March 1995 poll conducted by the Datafolha 
agency, however, only 46 percent of Brazilians responded that 
"democracy is always preferred over dictatorship," as compared 
with 59 percent endorsing the same proposition in March 
1993. The relatively low crime rates during the military period 
may be a factor in the shift in public opinion regarding democ- 
racy. 

Brazil has a diversity of regional political cultures. Politics in 
the states of the Northeast (Nordeste) and North (Norte) are 
much more dependent on political benevolence from Brasilia 
than are the states of the South (Sul) and Southeast (Sudeste). 
Because Brazil's southernmost state, Rio Grande do Sul, suf- 
fered three civil wars and was involved frequently in political 
conflicts in the Rio de la Plata areas, its population holds 



258 



Government and Politics 



strong political loyalties. As a result, the Liberal Front Party 
(Partido da Frente Liberal — PFL) and the PSDB have very lim- 
ited penetration in Rio Grande do Sul. Both parties are consid- 
ered traitors: the PFL had splintered from the military regime's 
Democratic Social Party (Partido Democratico Social — PDS) in 
1984, and the PSDB had broken from the Brazilian Democratic 
Movement Party (Partido do Movimento Democratico 
Brasileiro — PMDB) in 1988. 

In the Southeast state of Minas Gerais, politics is conducted 
in a very cautious, calculated manner. Politicians there are 
known for their ability to negotiate and cut bargains, and they 
have political "adversaries" rather than enemies. In the western 
frontier states, politics is constantly evolving, because of the 
continuous inward migration from other regions. Most politi- 
cians and voters are newcomers with no local political roots or 
traditions. 

The Southeast states of Rio de Janeiro and Sao Paulo have 
received large influxes of rural-urban and north-south migra- 
tion since the 1950s. Because of higher levels of industrializa- 
tion, per capita income, labor union membership, and 
education, the level of political consciousness is higher in these 
states than in those to the north and west. 

As a result of intense rural-urban migration since 1960, 
urban voters have increased from fewer than 30 percent to 
more than 70 percent of the population in 1994. In 1960 only 
22 percent (15.5 million) of Brazil's population was registered 
to vote; by 1994 more than 60 percent (nearly 95 million) of 
the population was enfranchised. The new migrants to urban 
areas quickly enhanced their political consciousness through 
television, increased schooling, and membership in new associ- 
ations, such as labor unions. 

Constitutional Framework 

Brazil has had eight constitutions since independence in 
1822, beginning with the constitution of March 25, 1824. The 
republican constitution promulgated on February 24, 1891, 
was very similar to the United States constitution, containing 
separation of powers, checks and balances, a bicameral legisla- 
ture, federalism, and direct elections. Concepts of corporatism 
and centralization from Italy and Portugal influenced the 1934 
and 1937 constitutions. The return to representative democ- 
racy in 1945-46 produced a more balanced, liberal document, 
which maintained a considerable role for the state in the 



259 



Brazil: A Country Study 

nation's economy. Military rule after 1964 forced an uneasv bal- 
ance between "relative democracy" and the "safeguards of a 
national security state." reflected in the 1967 and 1969 constitu- 
tions. 

After 1964 the government of Marshal Humberto de Alen- 
car Castelo Branco (president, 1964-67) issued four institu- 
tional acts and a series of complementary acts and decrees that 
severely compromised the 1946 constitution. Outgoing Presi- 
dent Castelo Branco also convoked a lame-duck Congress in 
December 1966 and January 1967 to approve a new constitu- 
tion drafted by his legal team. The 1967 constitution removed 
some important autocratic powers accorded the first military 
president. 

This 1967 constitution soon became an anathema to the mil- 
itary, and the government of General Arthur da Costa e Silva 
(president, 1967-69) decreed the Fifth Institutional Act in 
December 1968, which allowed the regime to close Congress 
and begin a third wave of political purges (cassafdes). Before his 
incapacitating stroke in August 1969, Costa e Silva and his vice 
president, Pedro Aleixo, had apparently begun drafting a new 
constitution. The fourth military president. General Ernesto 
Geisel (president, 1974-79), decreed the end of the Fifth Insti- 
tutional Act in January 1979. 

In 1985, the first year of Jose Sarney's term,. Congress 
approved the convocation of the National Constituent Assem- 
bly (Assembleia Nacional Constituinte — ANC) to draft a new 
constitution. Elected on November 15, 1986, and seated in Feb- 
ruary 1987, the ANC adopted a "from scratch" participator^" 
methodology Using this methodology, the ANC divided itself 
into eight committees and twenty-four subcommittees to draft 
respective sections of the document, and it held public hear- 
ings on suggested content. After twenty months of deliberation 
and two rounds of voting, the ANC produced the 1988 "citizen 
constitution," which was promulgated on October 5, 1988. 

The majority party, the PMDB, was not united during the 
ANC. After the drafting committee produced a "progressive " 
first draft, the PMDB's center and right wings joined conserva- 
tives from other parties to form the conservative coalition, the 
Big Center (Centrao), in December 1987, to alter the internal 
rules governing first-round voting. The Big Center prevailed 
on some crucial votes, such as maintaining the presidential sys- 
tem and making Sarney's presidential term five years rather 



260 



Government and Politics 



than four. However, plagued with absenteeism it was defeated 
in other areas, such as the economic order. 

The result is a mixed document with certain inconsistencies. 
Very liberal in the section dealing with basic human rights, the 
constitution also enhances "social rights," such as retirement 
after thirty-five years of service, job stability for public employ- 
ees, and four months of paid maternity leave. It maintains a 
strong role for the state in the economy and distinguishes 
between foreign and national capital enterprises. 

The ANC maintained the skewed representational plan 
favoring Brazil's underdeveloped regions. It also created three 
very small states — Amapa, Roraima, and Tocantins — with six- 
teen additional deputies and nine new senators, while granting 
Sao Paulo ten more deputies. The states have considerable 
autonomy in certain areas, such as maintaining state banks, but 
the federal constitution is very centralized regarding election 
of state officials, mandates, and government organization. 

The ANC was able to pass many controversial articles using 
bland wording and a final reference to "future regulation by 
ordinary legislation." Some 300 areas of the new constitution 
were not automatically applicable and awaited such "regula- 
tion" in subsequent legislative sessions (1989-90, 1991-92, 
1993-94, 1995-96, and 1997-98). Thus, the constitution is 
incomplete. 

The first draft of the constitution was based on a mixed par- 
liamentary presidential model similar to that of Portugal and 
France, but a crucial vote taken on March 22, 1988, reinstated 
the pure presidential model. The redrafting to incorporate this 
major change was incomplete, however, and several vestiges of 
the mixed parliamentary system remained. Most notable was 
the provisional measure (medida provisoria — MP), a sort of tem- 
porary decree, which replaced the presidential decree law. 
Whereas the decree law took effect only after thirty days of 
inaction by the legislature, the MP takes effect immediately. 
Although the MP ceased to exist after thirty days of legislative 
inaction, the president could reissue it for successive thirty-day 
periods. This power was formidable, especially for a president 
not commanding an absolute majority in Congress. In early 
1997, however, the Senate approved an amendment extending 
an MP's validity from thirty to ninety days but prohibiting addi- 
tional extensions and the use of MPs to create ministries or 
other government entities. 



261 



Brazil: A Country Study 

The 1988 constitution required each state to rewrite its con- 
stitution within one year (during 1989) and each municipality 
to elaborate its Organic Law (during 1990), which defines how 
it operates. In 1991 the Federal District (Brasilia) drafted its 
Organic Law, and the new states of Amapa, Roraima, and 
Tocantins drafted their new constitutions. 

ANC members agreed that a very detailed constitution 
would require frequent revisions to keep pace with an ever- 
changing society and economy. Thus, Article 3 of the transi- 
tional provisions provided that after five years the Congress 
could be converted into a unicameral assembly for constitu- 
tional revision, deliberating by absolute majority instead of by 
the three-fifths margin in each house normally required for the 
amendment process. In addition, Article 2 of the transitional 
provisions called for a national plebiscite to decide on the form 
of government (republic or constitutional monarchy) and the 
system of government (presidential or parliamentary). A con- 
stitutional amendment formally setting the plebiscite for April 
21, 1992, passed the Chamber of Deputies. However, in late 
1991, during the second round of voting in the Senate, Presi- 
dent Collor intervened to ensure defeat, fearing negative con- 
sequences for his already beleaguered government. The 
plebiscite was finally held on April 21, 1993, and the presiden- 
tial republic was confirmed by a wide margin. 

The revision of the constitution scheduled for late 1993 and 
early 1994 took place, but with meager results. Factors hinder- 
ing constitutional revision included aftershocks from a con- 
gressional financial scandal ("Budgetgate") exposed by the 
Congressional Investigating Committee (Comissao Parlamen- 
tar de Inquerito — CPI); the October 3, 1994, elections; strong 
pressure from nationalist and corporatist groups in defense of 
state enterprises, job stability, and national firms; and nonpar- 
ticipatory methodology (see Glossary). As of May 1994, the 
only major change to the constitution was to shorten the presi- 
dential term from five to four years. The next attempt to thor- 
oughly revise the 1988 constitution was begun in February 
1995, but by the regular amendment process (three-fifths 
majority in both houses). Some members would like to use the 
1998 elections to again convoke (as in 1987-88) a "constitu- 
tional revision Congress" in 1999, to do a revision by a unicam- 
eral, absolute majority (see Constitutional Reform, this ch.). 



262 



Government and Politics 



Structure of Government 

Brazil is a presidential and federative republic with consider- 
able decentralized federalism. It is composed of twenty-six 
states and the Federal District (Brasilia). In 1996 the states 
were subdivided into 5,581 municipalities (see fig. 1). The sys- 
tem is built on a directly elected president with a national con- 
stituency and a Congress elected by very parochial regional 
interests. Although the 1988 constitution reestablished many of 
the prerogatives of the bicameral Congress, the president 
retains considerable "imperial" powers. The federal judiciary 
enjoys considerable independence and autonomy. Under a sys- 
tem of checks and balances similar to the United States system, 
the three branches of government operate in harmony and 
with mutual respect. However, on rare occasions, one of the 
branches may challenge or reject the interference of the oth- 
ers. 

Since the end of military rule in 1985, unionization, collec- 
tive bargaining, and frequent strikes have become common- 
place among federal employees in all three branches. The 1988 
constitution grants job stability to all federal employees with 
more than five years of service, including those who had been 
hired without public examination. All new hiring must be by 
civil service examinations, and job stability comes after two 
years of probation. Mandatory retirement for all public ser- 
vants, except for those elected to political office, is at age sev- 
enty. 

In January 1995, the government employed (excluding state 
enterprises) 650,000 civilian (executive, 586,000; judicial 
50,000; and legislative, 14,000) and 310,000 military personnel, 
totaling 960,000. A total of 723,000 were retired. State enter- 
prises counted another 700,000 active employees. 

The Executive 

Executive-branch reorganizations are frequent in Brazil, as 
each president seeks to impose his personal style and to incor- 
porate political bargains struck. President Sarney expanded 
the cabinet to a record twenty-seven ministries. His successor, 
President Collor, embarked on a massive reorganization, 
reducing the number of ministries to twelve, abolishing many 
agencies, and firing some 80,000 federal employees. In a reor- 
ganization of his cabinet in early 1992, Collor was forced to dis- 
member several ministries to create new positions in an effort 



263 



Brazil: A Country Study 

to enhance political support. President Franco again expanded 
the cabinet to twenty-seven positions in October 1992. 

In January 1995, President Cardoso installed a cabinet with 
twenty-two ministers and the ministerial-rank chief of the Civil 
Household of the Presidency and implemented several impor- 
tant changes (see fig. 12). The Cardoso government charged 
the new head of the Joint Chiefs of Staff with creating a minis- 
try of defense by the end of 1995 (a target that was not met). It 
also granted three ministerial positions — Planning, Civil 
Household, and Finance — superior status in terms of coordi- 
nating and monitoring the other nineteen. In addition, the 
government also created a Political Council (Conselho 
Politico) to coordinate major political strategy and policy deci- 
sions. The council was composed of the presidents of the par- 
ties supporting the government. 

Since Joao Baptista de Oliveira Figueiredo (president, 1979- 
85), most presidents have attempted to reduce and streamline 
the executive branch. President Sarney reorganized the 
Administrative Department of Public Service (Departamento 
Administrativo do Servico Publico — DASP), created in the 
1930s, into the Federal Administration Secretariat (Secretaria 
de Administracao Federal — SAF), which Presidents Collor and 
Franco revamped. By 1994 the SAF had achieved moderate suc- 
cess in consolidating the number of diverse public-service 
career structures and salary differentials. Congress passed a 
new executive-branch civil service law, the Single Judicial 
Regime (Regime Juridico Unico — RJU), in December 1990. In 
addition to the large number of state enterprises under govern- 
ment control, the executive branch also includes many autono- 
mous agencies and financial institutions, such as the Bank of 
Brazil (Banco do Brasil) and the Federal Savings Bank (Caixa 
Economico Federal). 

A president must be a native Brazilian over age thirty-five. 
From 1945 to 1979, presidents had five-year terms. Following 
President Figueiredo's six-year term, the 1988 constitution 
again set the term at five years, but the 1994 constitutional revi- 
sion reduced the mandate to four years. Although all of Brazil's 
constitutions since 1891 have prohibited immediate reelection 
of presidents, governors, and mayors, in June 1997 Congress 
approved an amendment allowing reelection. Thus, President 
Cardoso and the twenty-seven governors may stand for reelec- 
tion in 1998, and the mayors elected in 1996 may be reelected 
in 2000. 



264 



Government and Politics 



The Brazilian president has the power to appoint some 
48,000 confidence positions, of which only ambassadors, 
higher-court judges, the solicitor general, and Central Bank 
directors must have Senate approval. The president may also 
use the line-item veto, impound appropriated funds, issue 
decrees and provisional measures, initiate legislation, and 
enact laws. 

Until 1964 the president and vice president were elected on 
separate tickets, which produced incompatible duos in 1950 
and 1960. When Vargas committed suicide in 1954 and Janio 
Quadros (president, January-August 1961) resigned in August 
1961, the actions of their vice presidents produced severe insti- 
tutional crises, leading to their respective ousters by military 
intervention. Since 1964 presidents and vice presidents have 
been elected on a single ticket, indirectly until 1989 and by 
direct popular vote in 1989 and 1994; a second round takes 
place if a majority is needed. 

The return to civilian rule in 1985 occasioned important 
roles for vice presidents. President-elect Tancredo de Almeida 
Neves died before taking office, and his vice president, Jose 
Sarney, was allowed to complete his term. After President Col- 
lor was impeached in 1992, his vice president, Itamar Franco, 
completed his mandate. In the event that the president and 
vice president become incapacitated, the line of succession falls 
sequentially to the president of the Chamber of Deputies, the 
president of the Senate, and the president of the Federal 
Supreme Court (Supremo Tribunal Federal — STF). If less than 
half of the mandate has been completed, a supplementary 
election must be called within ninety days. If more than half 
the mandate has been completed, the Congress elects a new 
president and vice president within thirty days. 

The Legislature 

Brazil's national legislature is composed of the 513-member 
Chamber of Deputies and the eighty-one-member Senate. Con- 
gress has a basic four-year term, but senators serve for eight 
years. It meets from March through June, and from August 
through December. The states have unicameral legislatures 
elected simultaneously with Congress. The municipalities have 
city councils with four-year terms; municipal elections take 
place two years after state and national elections. Since 1930 
Congress has been closed five times under authoritarian inter- 
vention: November 1930 to December 1933; November 1937 to 



265 



Brazil: A Country Study 






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266 



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267 



Brazil: A Country Study 

February 1946; November 1966; December 1968 to October 
1969; and for fifteen days in April 1977. 

The 1988 constitution restored most of the powers and pre- 
rogatives that Congress had lost during the military regime. 
Congress enjoys administrative and fiscal autonomy, as well as 
full power over the budget. Under certain circumstances, it 
may issue legislative decrees not subject to presidential veto. An 
absolute majority secret vote in Congress is required to over- 
ride a presidential veto. Congress also has a very important role 
in setting national, especially economic, policies. For example, 
it must approve all international agreements, including rene- 
gotiation of the foreign debt. 

Legislators enjoy almost total parliamentary immunity, even 
for capital crimes, such as homicide. Even if the respective 
chamber lifts the legislator's immunity by an absolute majority 
secret vote, the legislator retains the privilege of being tried by 
the STF. In December 1994, nearly 100 lawsuits (courts and 
prosecutors) sought to lift the immunity of deputies and sena- 
tors. However, the legislative esprit de corps is so strong that 
only rarely does a case come to the floor for a vote. 

Since 1950 federal and state legislators have been elected at 
regular four-year intervals. Senators must be at least thirty-five 
years old. Each state has three seats, and one or two seats are 
elected alternately every four years to eight-year terms. Elec- 
tion is by simple majority. Since 1946 deputies have had four- 
year terms and must be at least twenty-one years old. The 1946 
constitution granted states with small populations a minimum 
delegation of seven deputies; larger states counted one addi- 
tional deputy for every 150,000 inhabitants up to 3 million, and 
after that one for every 250,000. The small states imposed this 
system to reverse the dominance of the two largest states (Sao 
Paulo and Minas Gerais) in the Chamber of Deputies during 
the Old Republic (1889-1930). 

In 1970, at the height of the military oppression, the balance 
was tipped in favor of the larger, more developed, urbanized 
states. State delegations were calculated based on the size of 
the electorate, rather than on population. The minimum dele- 
gation was reduced to three, and most of the states in rural Bra- 
zil had their contingents cut in half. These changes reduced 
the Chamber of Deputies to 310 deputies. Ironically, this sys- 
tem helped the Brazilian Democratic Movement (Movimento 
Democratico Brasileiro — MDB) elect a 44 percent minority in 
1974; thus, in 1978 the military returned to calculations based 



268 



Government and Politics 



on population. The 1988 constitution gave Brazil's largest state, 
Sao Paulo, seventy deputies, instead of the 115 it should have to 
be proportionate to its population. 

Election of federal and state deputies and city council mem- 
bers is by proportional representation. Brazil uses one of the 
least-used variants of proportional representation, the open-list 
system (the d'Hondt method — see Glossary) . Thus, there is vir- 
tually no conflict or competition among parties in the elec- 
tions. The conflict is concentrated within each party or 
coalition list, and most deputies use their own resources (which 
may be considerable, up to US$5 million for a federal deputy) 
for campaigning. Therefore, they owe no loyalty to their party, 
and change labels frequently after their election (see table 18, 
Appendix). This produces very weak parties and low cohesion 
in Congress. The Workers' Party is an exception to this rule. 

Those holding office (elective or appointive) in the execu- 
tive branch who desire to become candidates for elective office 
must resign six months before the election. This requirement 
precludes a minister, governor, mayor, or state enterprise direc- 
tor from using the powers and resources of the office to favor 
his or her election. 

The Senate and Chamber of Deputies have legislative initia- 
tive. The Senate and Chamber of Deputies have six and sixteen 
standing committees, respectively, plus a joint budget commit- 
tee. The 1988 constitution gives the committees the power to 
approve or kill legislation. 

To override a committee decision and bring the bill to the 
floor of the appropriate house requires a petition signed by a 
certain number of members. Once one house passes a bill, the 
other deliberates on it. If a different version of the bill is 
passed, it returns to the original house for a final vote on the 
differences. The internal rules of each house allow members 
and party leaders certain prerogatives of obstruction. 

Party leaders distribute party quotas on committees propor- 
tionate to the party's size. Committee presidencies are appor- 
tioned among the parties on an annual rotational basis; thus, 
there are no longstanding powerful committee chairs, as in the 
United States Congress. There are no subcommittees, and leg- 
islative committees rarely conduct public hearings. 

When a matter is very serious, at least one-third of the 
respective house or the full Congress may petition to initiate a 
CPI (Congressional Investigating Committee). The CPIs have 
full subpoena and investigative powers, such as the disclosure 



269 



Brazil: A Country Study 

of bank, income tax, telephone, credit card, and other records. 
A CPI produced the evidence used to impeach President Col- 
lor in 1992 and uncovered the Budgetgate scandal of 1993-94. 

Normally, the Chamber of Deputies has around 50 percent 
turnover at each election. In 1990 this figure rose to nearly 60 
percent; in 1994 it returned to 54 percent. In years when two- 
thirds of the Senate stands for election and gubernatorial seats 
are being contested, turnover can also be high in the upper 
house (63 percent in 1994). 

Senators tend to be older and have more established politi- 
cal careers. Most have served as federal deputies, and many 
have been governors. Deputies usually tend to have served in 
city councils, state assemblies, and as state cabinet secretaries. 
In the first half of the 1990s, the proportion of deputies elected 
with no prior political experience increased. In 1995 the larg- 
est contingents in the Chamber of Deputies by occupation 
were businessmen, 32 percent; lawyers, 20 percent; medical 
doctors, 11 percent; engineers, 7 percent; labor leaders, 6 per- 
cent; teachers, 5 percent; economists, 5 percent; public ser- 
vants, 3 percent; journalists, 3 percent; and administrators, 2 
percent. 

Each house elects its presiding officers (one president, two 
vice presidents, four administrative secretaries, and four alter- 
nates) for two-year terms. The 1987-88 ANC (National Constit- 
uent Assembly) prohibited these legislative officers from being 
immediately reelected, a prohibition initially imposed by the 
military to break up "internal oligarchies." Traditionally, the 
largest party in each house has the prerogative of electing the 
president, but the PMDB (Brazilian Democratic Movement 
Party) was in such disarray in 1993 and 1995 that the Liberal 
Front Party (Partido da Frente Liberal — PFL), the second larg- 
est party, was able to build a coalition that elected the Chamber 
of Deputies president. By negotiation the PMDB returned to 
the Chamber presidency for the 1997-98 term, and the PFL 
won the Senate presidency for the first time since 1985. The 
presiding officers comprise an all-powerful Executive Board, 
which makes nearly all important political, administrative, pro- 
cedural, and agenda-setting decisions. The Senate president is 
also the president of the Congress and presides over joint ses- 
sions. 

During the 1987-88 ANC, an informal group called the Col- 
lege of Party Leaders developed. It became an important lead- 
ership group and was the forum for decisive bargaining on 



270 




Paldcio do Planalto, the executive office building, and 
Paldcio da Alvorada, the presidential residence, both designed by 

Oscar Niemeyer, Brasilia 
Courtesy Brazilian Embassy, Washington 

271 



Brazil: A Country Study 

crucial articles. This group has gradually acquired more power 
(especially agenda-setting) to the detriment of the formally 
elected officers, especially in the Chamber of Deputies. 

The political role of Congress began to increase even before 
the demise of the military regime. In 1979 President 
Figueiredo took office without the extraordinary powers of the 
Fifth Institutional Act. In the 1982 elections, the government 
party lost its absolute majority in the Chamber of Deputies (see 
table 19, Appendix), and in 1983 the Chamber of Deputies 
defeated Figueiredo's initial decree laws, including one on 
social security. 

Maximum political power accrued to Congress in 1985, 
when the vice president-elect, Jose Sarney (PMDB-Maranhao) , 
assumed the presidency under less than auspicious circum- 
stances. From March 1985 through February 1986, Chamber of 
Deputies President Ulysses Guimaraes (PMDB-Sao Paulo) and 
PMDB Senate floor leader Fernando Henrique Cardoso 
(PMDB-Sao Paulo) more or less ruled with Sarney as informal 
"prime ministers." Sarney, however, recovered considerable 
presidential powers as a result of his cruzado (for value of the 
cruzado — see Glossary) economic stabilization plan, which 
began on March 1, 1986. Congress again assumed maximum 
power in 1992, when Brazil became the first nation in the world 
to constitutionally impeach a sitting, directly elected president. 

The National Accounts Court (Tribunal de Contas da 
Uniao — TCU) is the external control and oversight arm of 
Congress. The TCU conducts inspections, usually following 
newspaper exposes or requests from members of Congress, 
and audits the executive branch's annual accounts. Until the 
1988 constitution, the president, with Senate approval, 
appointed members to the TCU. Retiring or defeated mem- 
bers of Congress or friends of the president in need of a sine- 
cure usually filled the positions. With rare exceptions, TCU 
members have represented political factions and groups, and 
their main role is to protect allies who have been charged with 
corruption. 

Under the 1988 constitution, recruitment criteria for the 
TCU became more specific. The president, with Senate 
approval, appoints three of the nine members. Two of the pres- 
idential appointees must be auditors or federal prosecutors 
from the TCU and must be chosen from a three-name list pre- 
pared by the TCU. Congress chooses the remaining six mem- 
bers. Each state has a State Accounts Court (Tribunal de 



272 



Government and Politics 



Contas dos Estados — TCE), but only the cities of Rio de Janeiro 
and Sao Paulo have a Municipal Accounts Court (Tribunal de 
Contas Municipals — TCM). The accounts of all other munici- 
palities are reviewed by their respective TCE. 

The Judiciary 

The judicial branch is composed of federal, state, and 
municipal courts. By 1995 small-claims courts augmented some 
municipal courts. Only appointments to the superior courts 
are political and therefore subject to approval by the legisla- 
ture. The minimum and maximum ages for appointment to 
the superior courts are thirty-five and sixty-five; mandatory 
retirement is at age seventy. These federal courts have no chief 
justice or judge. The two-year presidency of each court is by 
rotation and is based on respecting seniority. 

The 1988 constitution produced five significant modifica- 
tions in Brazil's judicial system. First, it converted the old Fede- 
ral Court of Appeals (Tribunal Federal de Recursos — TFR) 
into the Superior Court of Justice (Superior Tribunal de 
Justica — STJ). Second, it created an intermediate-level 
Regional Federal Court (Tribunal Regional Federal — TRF) sys- 
tem. Third, the federal general prosecutor was given a two-year 
renewable term, subject to confirmation by the Senate, without 
the possibility of removal by the president. Fourth, the STF 
(Federal Supreme Court) can issue a warrant of injunction 
(mandado de injuncdo) to ensure rights guaranteed by the con- 
stitution but not regulated by ordinary legislation. And fifth, 
the STF can decide on matters of constitutionality without wait- 
ing for appeals to come through the federal courts. 

The judiciary came under criticism during the Collor and 
Franco administrations. The STF was harshly criticized during 
the Collor impeachment investigation and subsequent trials, 
particularly for the slow pace of the trials. In late 1993, former 
president Collor's appeal against the Senate's decision to strip 
his political rights for eight years ended in a four-four tie in the 
STF. Three judges had disqualified themselves: Collor's former 
foreign minister, Collor's first cousin, and the STF president 
who had presided over the Senate impeachment trial. Instead 
of throwing the case out after the tie vote, the STF called three 
substitute judges from the STJ, who broke the tie against Col- 
lor. 

In addition, executive-branch public employees (especially 
in the armed forces) became discontented with the STF's utter 



273 



Brazil: A Country Study 

disregard for parity salary scales among the three branches and 
with government austerity targets. To address these problems 
and to streamline the judicial process, the 1993-94 attempt at 
constitutional revision produced numerous proposals for 
reforming the judicial branch, including an external control 
body, the Penal Code (1941), and the 1916 Civil Code (revised 
in 1973). Significant reforms have yet to be enacted, however. 
The need for judicial reform in general is widely recognized 
because the current system is inefficient, with backlogs of cases 
and shortages of judges. Cases are frequently dismissed 
because they are too old. Lawyers contribute to backlogs by 
dragging out cases as long as possible because they are paid 
based on the amount of time they spend on a case. In addition, 
STF jurisprudence is not followed by lower courts. Some cor- 
rupt judges delay certain cases so that they can be dismissed. 
Vacancies on the bench are difficult to fill because of low pay 
and highly competitive examinations that often eliminate 90 
percent of applicants. 

Created in October 1890, the STF has eleven members 
appointed by the president with Senate approval. The STF 
decides conflicts between the executive and legislative 
branches, disputes among states, and disputes between the 
federal government and states. In addition, it rules on disputes 
involving foreign governments and extradition. The STF issues 
decisions regarding the constitutionality of laws, acts, and pro- 
cedures of the executive and legislative branches, warrants of 
injunction, and writs of habeas corpus. Further, it presents 
three-name lists for certain judicial-branch nominations, and 
conducts trials of the president, cabinet ministers, and congres- 
sional and judiciary members. The president of the STF is 
third in the line of presidential succession and would preside 
over an impeachment trial held by the Senate. 

The TFR (Federal Court of Appeals) was created under the 
1946 constitution. It initially had thirteen members but 
expanded to twenty-seven members in 1979. In 1988 the TFR 
became the thirty-three-member STJ (Superior Court of Jus- 
tice). As the last court of appeals for nonconstitutional ques- 
tions, the STJ reviews decisions of the TRFs (Regional Federal 
Courts) and tries governors and federal judges. The president 
appoints its members with Senate approval on rotation. One- 
third are picked from the ranks of TRF judges; one-third from 
the ranks of State Supreme Court judges; and one-third from 
the ranks of state and federal public prosecutors. 



274 



Government and Politics 



The 1988 constitution created five TRFs — Recife, Brasilia, 
Rio de Janeiro, Sao Paulo, and Porto Alegre. Each TRF must 
have at least six judges, appointed by the president and 
approved by the Senate. One-fifth must be from among lawyers 
or public prosecutors with at least ten years of professional 
experience. Members must be at least thirty years of age but no 
older than sixty-five. 

Brazil's judicial system has a series of special courts, in addi- 
tion to the regular civil court system, covering the areas of mili- 
tary, labor, and election affairs. The Superior Military Court 
(Superior Tribunal Militar — STM), created in 1808 byjoao VI 
(king of Portugal, 1816-26), is the oldest superior court in Bra- 
zil. It is composed of fifteen judges appointed by the president 
with Senate approval. Three members must have the rank of 
admiral in the Brazilian Navy (Marinha do Brasil), three must 
be general officers of the Brazilian Air Force (Forca Aerea 
Brasileira — FAB), four must be army generals, and five must be 
civilians. The latter must be over age thirty and under age sixty- 
five. Two of the civilians are alternately chosen from among 
military justice auditors and military court prosecutors; three 
are lawyers with noted judicial knowledge and ten years of pro- 
fessional experience. 

The STM has jurisdiction over crimes committed by mem- 
bers of the armed forces. It was also used extensively to try civil- 
ians accused of crimes against "national security" during the 
military regime. States also have military courts to try cases 
involving state Military Police (Policia Militar — PM). During 
the constitutional revision process of 1995, proposals were 
made to close down such courts at the state level. These pro- 
posals were renewed in 1997 after a series of revolts and strikes 
by Military Police in several states. 

The government of Getulio Vargas created the Superior 
Electoral Court (Tribunal Superior Eleitoral — TSE) in 1932 in 
an effort to end election fraud and manipulation. The TSE has 
jurisdiction over all aspects of elections and regulates the func- 
tioning of political parties. Its powers include supervising party 
conventions and internal elections; granting or canceling regis- 
tration of parties; registering candidates and certifying those 
elected; regulating and supervising party access to free televi- 
sion and radio time during an election; and registering voters. 
All states have a Regional Electoral Court (Tribunal Regional 
Eleitoral — TRE); larger cities have municipal election judges, 
and smaller towns have local election boards. 



275 



Brazil: A Country Study 

The TSE has seven members, each with a two-year mandate. 
By secret ballot, the STF chooses three of its members to sit on 
the TSE, and the STJ chooses two of its members. The presi- 
dent appoints, with Senate approval, two lawyers from among a 
six-name list submitted by the STF. The TSE elects its president 
and vice president from among the members of the STF. 

Since 1950 the TSE has made important decisions affecting 
Brazil's political system. In 1950 and 1955, the TSE decided in 
favor of the elections of presidents Getulio Vargas (1951-54) 
and Juscelino Kubitschek (1956-61) by simple rather than by 
absolute majorities. In 1980 the TSE denied the "magic" label 
of the Brazilian Labor Party (Partido Trabalhista Brasileiro — 
PTB) to the Leonel de Moura Brizola faction, which was then 
forced to create the Democratic Labor Party (Partido 
Democratico Trabalhista — PDT). In 1994 the TSE prohibited 
noncandidates from appearing on the "free TV election hour," 
thus barring former President Collor from participating in the 
television campaign of the National Reconstruction Party 
(Partido da Reconstrucao Nacional — PRN) . 

The system of labor courts was created by Getulio Vargas in 
the 1930s to arbitrate labor-management disputes, which previ- 
ously had been settled by police action. The 1946 constitution 
created the Superior Labor Court (Tribunal Superior do Tra- 
balho — TST). Each state has a Regional Labor Court (Tribunal 
Regional do Trabalho — TRT), although Sao Paulo State has 
two TRTs, and each municipality has a set of labor conciliation 
boards. The labor court system has jurisdiction over all labor- 
related questions. It registers labor contracts, arbitrates collec- 
tive and individual labor disputes, recognizes official union 
organizations, resolves salary questions, and decides the legal- 
ity of strikes. 

The president appoints, with Senate approval, twenty-seven 
judges to the TST. Seventeen of the judges — eleven career 
labor judges, three labor lawyers, and three labor court prose- 
cutors — receive lifetime terms (to age seventy). Ten temporary 
judges are appointed from lists evenly divided between the con- 
federations of labor and management. 

The Public Ministry is an important independent body in 
Brazil's judicial system. Its principal component, the Office of 
the Solicitor General of the Republic (Procuradoria Geral da 
Republica — PGR), is composed of several public prosecutors 
selected by public examination. The PGR's headquarters is in 
Brasilia, and it has branches in every state. The PGR is charged 



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Government and Politics 



with prosecuting those accused of federal crimes, those 
accused of offending the president and his ministers, and all 
federal officials and employees accused of crimes. Before 1988 
the president could appoint and dismiss the solicitor general at 
will. Under the 1988 constitution, the solicitor general has a 
fixed, renewable two-year term and is appointed by the presi- 
dent, with Senate approval, among the career prosecutors. 

The Office of the Federal Attorney General (Advocacia- 
Geral da Uniao — AGU), which was separated from the PGR by 
the 1988 constitution, defends the federal government against 
lawsuits and provides legal counsel to the executive branch. 
The AGU was organized and staffed under a provisional mea- 
sure (MP) issued by President Franco. 

Each state has a State Supreme Court (Tribunal de Justica — 
TJ). The governor, with approval by the State Assembly (Assem- 
bleia do Estado), appoints the judges to the court. This court 
has the prerogative of appointing special state circuit judges to 
deal with agrarian problems. In addition, it is responsible for 
organizing and supervising the lower state courts. Each state is 
divided into district courts ( comarcas) . 

State and Local Governments 

Since independence Brazil has oscillated between centraliza- 
tion and state autonomy. During the empire (1822-89), Brazil 
had a centralized constitutional monarchy and little state 
autonomy. The emperor exercised the moderating power by 
appointing senators for life, presiding over a Council of State, 
removing and transferring police and judicial officials at will, 
and appointing provincial governors. 

The Old Republic was established in 1889 in part because of 
state demands for greater autonomy. Until 1930 the larger and 
more powerful states enjoyed great autonomy under a federal 
system patterned after the United States model, but the smaller 
and poorer states constantly suffered interventions by the cen- 
tral government. "Young Turk" lieutenants ( tenentes) rebelled 
against this system of state oligarchies in the 1920s and were 
prominent in the initial modernization strategies after the 
1930 revolution. From 1930 to 1945, the national government 
centralized control over state and local governments by 
appointing governors, who in turn appointed all mayors. 
Except for the brief period of 1933-37, the national govern- 
ment closed legislatures at all levels. The 1946 constitution 
reestablished a more balanced federalism, but maintained cen- 



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Brazil: A Country Study 



tral control over industrial, financial, labor, election, and devel- 
opment policies. In October 1965, the military regime began 
curtailing the autonomy of the states once again. From 1966 
through 1978, the central government appointed state gover- 
nors and mayors of state capitals and some 170 designated 
selected cities deemed vital to "national security." Active-duty 
army colonels were appointed as security chiefs in each state. 
As part of its "liberalizing opening," the military regime 
allowed direct elections for governors in 1982. In November 
1985, President Sarney and Congress allowed direct elections 
for mayors of state capitals and selected cities deemed vital to 
"national security." 

Until 1994 state governors and vice governors were elected 
to one four-year term, taking office on January 1 following 
their election. In 1998 those elected in 1994 may seek one con- 
secutive second term. State deputies are also elected to four- 
year terms but are not restricted to one term. Governors have 
state cabinets, and their executive branch is organized in a 
manner similar to the federal executive branch. Likewise, state 
assemblies organize their legislative process like that of Con- 
gress. After 1988 state assemblies lost their salary autonomy; 
state deputies may receive up to 75 percent of the salary of a 
federal deputy. 

State governments are responsible for maintaining state 
highway systems, low-cost housing programs, public infrastruc- 
ture, telephone companies, and transit police. Both state and 
municipal governments are responsible for public primary and 
secondary schools and public hospitals. Municipal govern- 
ments are also responsible for water, sewerage, and garbage ser- 
vices. State tax revenues are concentrated in sales taxes. State 
governments are allowed to operate state financial institutions, 
most of which are a constant problem for the Central Bank 
because they run heavy deficits, especially in election years. In 
1995 the Central Bank intervened in some of the state banks 
with the worst deficits (Sao Paulo, Rio de Janeiro, Alagoas, and 
Mato Grosso) and sought to privatize others. In October 1996, 
Brazil had 5,581 municipalities, of which more than 15 percent 
had populations under 5,000. The municipal taxing authority 
is concentrated on property and service taxes. 

Mayors and vice mayors must be at least twenty-one years of 
age and are elected to one four-year term. Reelection is now 
permitted as of the year 2000. City council members must be at 
least eighteen years of age and are elected to renewable four- 



278 



Government and Politics 



year terms under a proportional representation system. From 
1950 through 1970, municipal elections coincided with general 
federal and state elections. Local officials elected in 1970 were 
given two-year terms, so as to set local elecdons two years out of 
phase with general elections (the next local elections were held 
in 1972 and 1976). However, local officials elected in 1976 were 
given six-year terms to make municipal elections again coin- 
cide with general elections in 1982, but in turn the latter also 
got six-year terms to make local elections out of phase again (in 
1988, 1992, and 1996). 

The Political Party System 

Historical Origins and Evolution 

Shortly after Brazil's independence, the first political groups 
emerged with either pro-Brazilian or pro-Portuguese factions. 
During the second empire period (1831-89), the Conservative 
and Liberal parties alternated in power, and an embryonic 
Republican Party appeared in 1870. During the Old Republic 
(1889-1930), sections of the Republican Party in the larger 
states held political power. During the brief opening of repre- 
sentative politics between 1934 and 1937, attempts were made 
to organize national parties. 

After 1945, when parties and elections again were permitted, 
local factions in the interior that had been allied with the Var- 
gas government since 1930 organized the Social Democratic 
Party (Partido Social Democratico — PSD); the pro-Vargas 
groups in urban areas organized the PTB (Brazilian Labor 
Party) ; and all those opposed to Vargas initially formed the 
UDN (National Democratic Union). The PSD elected the pres- 
ident and an absolute majority to the 1946 Constituent Assem- 
bly. The Brazilian Communist Party (Partido Comunista 
Brasileiro — PCB), led by Luis Carlos Prestes, operated freely 
from 1945 through 1947, but the STF (Federal Supreme 
Court) canceled its registry in early 1948. 

By 1960 Congress had thirteen parties. Confronted with 
adverse results in the direct gubernatorial elections of October 
1965, President Castelo Branco (1964-67) decreed the end of 
this multiparty system and imposed a two-party system. His 
objective was to organize a strong majority support party and a 
loyal opposition. Thus, the National Renewal Alliance (Alianca 
Renovadora Nacional — Arena) and the MDB (Brazilian Demo- 
cratic Movement) were born. 



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Brazil: A Country Study 

About 90 percent of the UDN, 50 percent of the PSD, and 15 
percent of the PTB joined Arena. Although it held an absolute 
majority in Congress until its demise in 1979, Arena was 
plagued with regional and former party factionalism. The MDB 
suffered from ideological factionalism regarding the military 
government; the factions divided among the authentics (those 
most strongly opposed to the military government), the neo- 
authentics, and the moderates. 

As a result of the voting trends of the 1974, 1976, and 1978 
elections, which channeled protest votes to the MDB, General 
Golbery do Couto e Silva, the architect of much of the regime's 
political evolution from 1964 until his retirement in August 
1981, called for a party realignment to achieve broader politi- 
cal maneuvering space for the government. A survey con- 
ducted among members of Congress in March 1979 showed 
that nearly three-fourths of Arena and two-thirds of the MDB 
desired a multiparty system. In December 1979, Congress 
approved government-sponsored legislation abolishing Arena 
and the MDB and permitting moderate party pluralism. 

Initially, the realignment strategy was successful. The MDB 
became the PMDB (Brazilian Democratic Movement Party) but 
with half its 1979 size. Arena became the PDS (Democratic 
Social Party), and retained its majority position. MDB moder- 
ates and Arena liberals organized the government auxiliary 
Popular Party (Partido Popular — PP) led by Senator Tancredo 
Neves and Deputy Magalhaes Pinto. Former deputy Ivette Var- 
gas and former governor Leonel Brizola resurrected the PTB; 
and the new, more militant labor unions organized the Work- 
ers' Party. 

In May 1980, this pluralism became less moderate when, in a 
highly political decision, the TSE (Superior Electoral Court) 
decided to give the PTB label to Ivette Vargas instead of Bri- 
zola, who had much broader organizational support within the 
party. Undaunted, Brizola immediately organized the PDT 
(Democratic Labor Party) and, in 1982, was elected governor 
of Rio de Janeiro, with twenty-three deputies versus Ivette Var- 
gas's thirteen (see table 19, Appendix). Because of the harsh 
1982 election rules imposed by the Figueiredo government, 
the Popular Party decided to dissolve itself and reincorporate 
with the PMDB, which greatly strengthened the latter in many 
states, especially in Minas Gerais and Parana. 

In 1985 Congress passed legislation easing the requirements 
for organizing new parties; thus, the ANC (National Constitu- 



280 



Government and Politics 



ent Assembly) seated eleven parties in 1987, nineteen in 1991, 
and eighteen in 1995. With the exception of the Workers' 
Party, traditionally all Brazilian political parties have been orga- 
nized from the top down, with a compact group of professional 
politicians making major decisions. The party system suffered 
considerable fragmentation during the late 1980s and early 
1990s, especially because of an exodus from the largest par- 
ties — PMDB and PFL (Liberal Front Party) — after 1988, similar 
to the factionalization in the 1950s and early 1960s. In 1987 the 
five largest parties accounted for 92.8 percent of the Chamber 
of Deputies. In 1989 this figure fell to 70.1 percent, and in 1992 
it fell further to 61.4 percent. However, after the 1994 elections 
a "reconcentration" occurred, and by 1997 the five largest par- 
ties accounted for 83.6 percent. 

In addition to strong internal cleavages, parties differ 
regionally. The Popular Party was almost totally concentrated 
in Minas Gerais and Rio de Janeiro. Initially, Brizola's PDT was 
concentrated in Rio de Janeiro and Rio Grande do Sul — the 
two states that had elected him in the 1947-64 period — but 
later expanded to more states and elected three governors in 
1990 (see table 20, Appendix). The Workers' Party remains 
concentrated in Sao Paulo but has expanded to other states in 
the South and North. The PSDB (Brazilian Social Democracy 
Party) is highly concentrated in Ceara and Sao Paulo. The PFL 
has always been concentrated in the Northeast. In Rio Grande 
do Sul, the PFL and the PSDB have very limited penetration 
(see Political Culture, this ch.). 

Major Parties in Congress 

In 1995 eight political parties, constituting 89.7 percent of 
the total membership of the Chamber of Deputies, were con- 
sidered major parties. Each held more than 5 percent of the 
Chamber. In 1997 the seven significant parties totaled 92.6 per- 
cent. 

Progressive Renewal Party 

The Progressive Renewal Party (Partido Progressista Renova- 
dor — PPR) was organized by the fusion of the PDS (Demo- 
cratic Social Party) and the Christian Democratic Party 
(Partido Democratico Cristao — PDC) in April 1993. After the 
Workers' Party, the PPR has the most consistent ideology. It 
generally supports the interests of business and rural landlords. 
It has a radical position in favor of privatization, economic 



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Brazil: A Country Study 

modernization, and reduction of the state's role in the econ- 
omy. In 1994 the PPR elected three governors, two senators, 
and fifty-three federal deputies. The PPR contributed one min- 
ister (health) to Cardoso's cabinet, but the party does not auto- 
matically support government positions in Congress. In 1995 
Paulo Maluf remained the main leader of the PPR, which 
attempted to form a bloc with the Progressive Party. In mid- 
September 1995, Maluf merged the PPR with the Progressive 
Party to form the Brazilian Progressive Party (Partido Progres- 
sista Brasileiro — PPB). 

Brazilian Democratic Movement Party 

The Brazilian Democratic Movement (Movimento 
Democratico Brasileiro — MDB), the political opposition to the 
military regime, began mobilizing national support in the late 
1970s. Like the PTB (Brazilian Labor Party) in the early 1960s, 
the MDB was on the verge of becoming a mass political party 
when Congress dissolved it in 1979. The party president, Dep- 
uty Ulysses Guimaraes, convinced the party to "add a P to the 
MDB" to preserve the hard-fought opposition image. 

The Brazilian Democratic Movement Party (Partido do 
Movimento Democratico Brasileiro — PMDB) won nine gover- 
norships in 1982 and elected Tancredo Neves in the electoral 
college of January 1985 in alliance with the PFL. The centrist 
PMDB advanced to become the "catch-all, rainbow" party, 
electing a majority to the ANC (National Constituent Assem- 
bly), and all but one governor in 1986. Overloaded with joiners 
(many of whom migrated from the Arena/PDS), the PMDB 
acquired a more conservative profile, provided a base for the 
Big Center in the ANC, and projected an image of close collab- 
oration with the Sarney government. These tendencies pro- 
voked the exodus of the more progressive members, such as 
the PSDB, in 1988. The party was less successful in the congres- 
sional and gubernatorial elections in 1988 and 1990, but made 
a slight comeback in the 1992 municipal elections. 

In 1994 the PMDB's presidential candidate, former governor 
Orestes Quercia, placed fourth. Nevertheless, the PMDB man- 
aged to elect nine governors and remained the largest party in 
Congress, electing fourteen senators and 107 federal deputies. 
The PMDB had two important ministries (transport and jus- 
tice), plus the Secretariat of Regional Development (now sub- 
ordinate to the Ministry of Planning) in the Cardoso 
government. With the defeat of Quercia and the loss of Sao 



282 



Lagoa (lagoon) Rodrigo deFreitas, Rio de Janeiro 
Courtesy Jaklen Muoi Tuyen 

Paulo State, the party has no coherent national leadership, and 
the support of its sizable congressional delegation is uncertain. 
In 1997 the PMDB became the second largest party in Con- 
gress, losing its first-rank position to the PFL. 

Liberal Front Party 

A manifesto signed by three governors, ten senators, and 
sixty federal deputies in December 1984 officially launched the 
center-right Liberal Front Party (Partido da Frente Liberal — 
PFL). In the January 15, 1985, electoral college, the PMDB-Lib- 
eral Front-PDS ticket of Tancredo Neves and Jose Sarney 
received the votes of 102 federal deputies, fifteen senators, and 
fifty-one delegates still nominally affiliated with the PDS. In 
1985 the PFL became the second largest party in Congress. It 
received a mere 8.8 percent of the votes in the municipal elec- 
tions of November 1985, but when Sarney was able to reform 
the cabinet inherited from Tancredo Neves in February 1986, 
the PFL received six ministries. In 1992 the PFL elected nearly 
1,000 mayors, second only to the PMDB. 

Although the PFL is noted for its neoliberal ideology, it is 
always predisposed to pragmatic bargaining, such as in 1994, 



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Brazil: A Country Study 

when it abstained from running its own presidential candidate 
and joined with the PSDB and PTB. Although it elected only 
two governors, it remained the second largest party in Con- 
gress, electing eleven senators and eighty-nine federal deputies 
(57 percent from the Northeast), in addition to the vice presi- 
dent. In Congress the PFL is known to have the most articulate 
and cohesive delegation, on a par with the Workers' Party. As a 
Cardoso coalition partner, the PFL received three ministries in 
1995. It became the first-ranked party in 1997. 

Brazilian Labor Party 

The Brazilian Labor Party (Partido Trabalhista Brasileiro — 
PTB), a pre-1964 leftist party, was resurrected as center-rightist 
in 1980. Two factions — one led by Leonel Brizola and the other 
led by Ivette Vargas — vied for leadership of the PTB. Although 
twenty of the twenty-three federal deputies who originally 
joined the PTB were brizolistas, Ivette Vargas was allied with 
General Golbery do Couto e Silva, chief of Ernesto Geisel's 
Civil Household of the Presidency, who pressured the TSE 
(Superior Electoral Court) to give the label to Vargas's pro-gov- 
ernment faction in May 1980. 

The PTB elected thirteen deputies in 1982 and became the 
junior member in a coalition with the PDS to give the latter a 
majority in the Chamber of Deputies. In 1986 the PTB elected 
seventeen federal deputies, and in 1990 it elected two gover- 
nors, four senators, and thirty-eight federal deputies. The party 
became a convenient election vehicle for politicians without 
space in the larger parties. 

In 1994 the PTB formed a coalition with the PFL and PSDB 
in support of Cardoso's candidacy. In that election, the PTB 
elected one governor, three senators, and thirty-one federal 
deputies — a slightly worse record than in 1990. In 1995 the 
PTB remained loyal to its coalition with the PSDB and PFL in 
support of the Cardoso government and occupied two minis- 
tries. 

Democratic Labor Party 

Brizola founded the social democratic-oriented Democratic 
Labor Party (Partido Democratico Trabalhista — PDT) in May 
1980 after losing the PTB label to Ivette Vargas. Over the ensu- 
ing fifteen years, many PDT members migrated to other par- 
ties. In 1990 the PDT elected three governors (Brizola 
included), five senators, and forty-seven federal deputies and 



284 



Government and Politics 



became the third largest party in Congress. In 1994 Brizola 
placed fifth for president and was defeated by Eneas Carneiro 
in Rio de Janeiro, thus ending his forty-seven-year political 
career. The PDT elected only two governors, four senators, and 
thirty-three federal deputies that year. 

Despite his massive defeat in 1994, Brizola refused to relin- 
quish personal control of the party and tried to impose a sys- 
tematic opposition posture on the congressional delegation, 
although the two PDT governors favored a more flexible posi- 
tion vis-a-vis the Cardoso government. Both the very dynamic 
governor of Parana, Jaime Lerner, and Dante de Oliveira, gov- 
ernor of Mato Grosso, left the PDT in 1997. 

Workers' Party 

The Workers' Party (Partido dos Trabalhadores — PT), the 
country's first independent labor party, is a unique party in 
Brazil. Organized externally (outside Congress) from the grass- 
roots up and based on the new trade unionism in Sao Paulo in 
1979, the Workers' Party initially did not want any professional 
politicians or students in its ranks. However, to have a voice in 
Congress it accepted five deputies and one senator into its 
ranks in early 1980. Since then the Workers' Party has grown 
steadily, doubling its Chamber of Deputies delegation in 1982, 
1986, and 1990, while tripling the number of its state deputies 
at each election, except in 1994. It has also won mayorships in 
several cities, including Sao Paulo (1988) (see Elections, 1988- 
96, this ch.). 

The Workers' Party is divided into six factions along a left- 
right continuum. The right consists of Radical Democracy 
(Democracia Radical), which has a social-democratic orienta- 
tion. The center consists of Unity and Struggle (Unidade e 
Luta), Catholic militants, and members of the right wing of 
Lula da Silva's former Articulation (Articulacao) faction. The 
left consists of Option of the Left (Opcao de Esquerda), which 
is divided into two subgroups — Hour of Truth (Hora da Ver- 
dade), the dissident left wing of the former Articulation group, 
former Stalinists, and Castroites; and Socialist Democracy 
(Democracia Socialista), the largest Trotskyite group, which 
existed before the Workers' Party. The extreme left consists of 
Workers' Party in the Struggle (Na Luta PT), which is divided 
into two subgroups — Socialist Force (Forca Socialista), whose 
members are former militants from extreme left guerrilla 
groups from the 1960s: the People's Electoral Movement 



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Brazil: A Country Study 

(Movimento Eleitoral do Povo — MEP) and Popular Action 
(Acao Popular — AP); and The Work (O Trabalho), consisting 
of Trots kyites from two student movements of the 1970s — Free- 
dom (Liberdade) and Struggle (Luta). 

Until 1993 Lula's moderate Articulation group had a large 
absolute majority in the Workers' Party. This group conducted 
pragmatic coalition-building in the 1990 and 1992 elections, 
which resulted in the election of increasing numbers of depu- 
ties and city council members. However, in 1993 the extreme 
left and left elected an absolute majority (53 percent) of the 
national party directorate, took control, and imposed stricter 
criteria for coalition-building at the state level. In 1995 and 
1997, the Articulation faction was again elected to the party 
presidency. 

Brazilian Social Democracy Party 

A center-left group of the PMDB (Brazilian Democratic 
Movement Party) organized the Brazilian Social Democracy 
Party (Partido da Social Democracia Brasileira — PSDB) in June 
1988. Many of these PMDB members were associated with the 
Progressive Unity Movement (Movimento de Unidade Progres- 
sista — MUP). They had become discontented with the rainbow 
party, with the PMDB's participation in the conservative Big 
Center during the National Constituent Assembly, and espe- 
cially with the politics of President Sarney. The principal lead- 
ers of the new party were from Sao Paulo, including Senator 
Cardoso (PMDB floor leader in the Senate). 

The PSDB adopted a modernizing, social-democratic pro- 
gram and favored a parliamentary system of government. In 
1988 it became the third largest delegation in Congress, 
although it elected only eighteen mayors that year (including 
Belo Horizonte). 

The PSDB occupied three ministries in the Franco cabinet, 
including Senator Cardoso at the Ministry of Foreign Affairs. 
In May 1993, Cardoso moved to the Ministry of Finance, where 
he launched the Real Plan for economic stabilization in March 
1994. With other major parties already engaged in different 
presidential alliances, the PSDB opted for a coalition with the 
more conservative PFL and PTB in the 1994 elections. The 
adoption of the new Real currency and the resulting near-zero 
inflation greatly boosted Cardoso's presidential candidacy in 
July and August and guaranteed his first-round victory with a 
margin of 54.3 percent on October 3. The PSDB also elected 



286 



Government and Politics 



six governors (including Ceara, Minas Gerais, Sao Paulo, and 
Rio de Janeiro), nine senators, and sixty-two deputies, a much 
better performance than in 1990 (see General Elections, 1994, 
this ch). The Social Democrats occupied six ministries, includ- 
ing the powerful ministries of Planning, Finance, and Civil 
Household of the Presidency, in the Cardoso government. 

Progressive Party 

The Progressive Party (Partido Progressista — PP) grew out of 
the PTR (Workers' Renewal Party). In 1990 the PTR and the 
Social Workers' Party (Partido Social Trabalhista — PST) had 
elected just two federal deputies each. The new Progressive 
Party had thirty-seven deputies in 1993, and by 1994 had grown 
to forty-five, the fifth largest delegation in the Chamber of Dep- 
uties. In 1995 the Progressive Party became leaderless, with no 
clear political strategy. Thus, it merged with the PPR (Progres- 
sive Renewal Party) to form the PPB (Brazilian Progressive 
Party) . 

Minor Parties in Congress 

In 1995 eleven smaller parties were represented in Congress, 
of which five are noteworthy. 

Liberal Party 

Deputy Alvaro Valle (PDS-Rio de Janeiro) founded the cen- 
ter-right Liberal Party (Partido Liberal — PL) in 1985. Dubbed 
the businessman's Workers' Party, the Liberal Party rapidly sup- 
planted the Liberal Front Party (Partido da Frente Liberal — 
PFL) in Sao Paulo. In the elections of November 15, 1986, the 
Liberal Party secured seven seats in the Chamber of Deputies 
and one in the Senate. It received 4.8 percent of the national 
vote in 1990 and elected fifteen deputies. On taking their seats 
in February 1991, the new Liberal Party deputies joined the 
opposition bloc against Collor. In 1994 the Liberal Party 
elected no governors, one senator, and thirteen deputies. 

Party of National Reconstruction 

Created in February 1989 by a takeover of the Youth Party as 
an election vehicle for Collor's candidacy, the conservative 
Party of National Reconstruction (Partido da Reconstrucao 
Nacional — PRN) immediately received twenty deputies and 
two senators. After Collor's election, the party increased its con- 



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Brazil: A Country Study 

gressional delegation in 1990, but had a dismal performance in 
the October 3 elections that year: forty deputies and only 7 per- 
cent of the vote, and no governors. In 1994 the party, reduced 
to four deputies and four senators, elected one federal and two 
state deputies. 

Brazilian Socialist Party 

Resurrected in 1986 from the pre-1964 Socialist Party, the 
left-wing Brazilian Socialist Party (Partido Socialista 
Brasileiro — PSB) elected seven representatives to the ANC 
(National Constituent Assembly). It joined the Brazilian Popu- 
lar Front (Frente Brasil Popular — FBP) coalition in 1989 in 
support of Lula, and again in 1994. With 2.3 percent of the 
national vote in 1990, the PSB elected eleven deputies, includ- 
ing twice governor of Pernambuco Miguel Arraes, PSB presi- 
dent. The PSB, which has a more pragmatic socialism than the 
Workers' Party, contributed two ministers to Franco's cabinet. 
In 1994 the PSB elected two governors (including Arraes), one 
senator, and fifteen federal deputies. 

Brazilian Communist Party 

In 1993 the Brazilian Communist Party (Partido Comunista 
Brasileiro — PCB), in a stormy national convention led by its 
president, Deputy Roberto Freire, removed Marxist-Leninist 
doctrine from the party statutes and the hammer and sickle 
from its flag, and changed its name to the PPS (Popular Social- 
ist Party). The original PCB had been organized in 1922. At 
Moscow's initiative, Luis Carlos Prestes took over the PCB's 
leadership in the mid-1930s. Prestes presided over the party 
until the early 1980s, when he was ousted by a renovated Euro- 
communist faction that had tired of his Stalinist line. During its 
illegal period (1948-85), the PCB was able to elect a few of its 
members under other party labels. The PCB regained legal reg- 
istry in 1985, elected three representatives to the ANC in 1986, 
and again in 1990, always in coalitions. Deputy Freire carried 
the PCB banner as candidate for president in 1989, and 
became floor leader of the Franco government in 1992. In 
1994 the PPS joined the FBP in support of Lula and elected 
one senator (Freire) and only two federal deputies. 

Communist Party of Brazil 

The Communist Party of Brazil (Partido Comunista do Bra- 
sil — PC do B) was created as an underground splinter from the 



288 



Government and Politics 



PCB in 1958, following Soviet leader Nikita Khrushchev's 
denunciations of Stalinist atrocities. The PC do B repudiated 
the new Moscow line and aligned itself with Maoism. When the 
People's Republic of China began making economic reforms in 
1979, the PC do B aligned itself with Albania. When Albania 
held its first free elections in 1992, the PC do B became non- 
aligned. After the PC do B was legalized in 1985, under the 
leadership of former deputy and former guerrilla Joao Amazo- 
nas, it elected more deputies in 1986 and 1990 than its arch 
rival, the PCB. The PC do B joined the FBP in support of Lula 
in 1989 and 1994. The PC do B doubled its delegation from 
five to ten federal deputies, representing nine states, in 1994. 
This feat resulted from PC do B domination of student organi- 
zations in most states and astute use of coalitions. 

Regional Strength of the Parties 

Within the basic government coalition — the PFL (Liberal 
Front Party), the PSDB (Brazilian Social Democracy Party), 
and the PTB (Brazilian Labor Party) — the PFL is highly con- 
centrated in the Northeast (Bahia and Pernambuco), and the 
PSDB to a lesser degree in the Southeast (Sao Paulo and Minas 
Gerais) . Almost half of the PSDB deputies elected in the North- 
east came from Ceara; the PTB elected only two deputies from 
the Northeast. 

Those formally opposed to the new Cardoso government, 
led by the Workers' Party and PDT, are concentrated in the 
South and Southeast. The Workers' Party became the second 
largest delegation in the states of Sao Paulo and Rio Grande do 
Sul in 1994, and slightly expanded its delegations in the North, 
Northeast, and Center-West (Centro-Oeste) regions. Although 
reduced from its 1990 size, the PDT remained the largest dele- 
gation in Rio de Janeiro, but fell to fourth rank in Rio Grande 
do Sul, after the PMDB (Brazilian Democratic Movement 
Party), Workers' Party, and PPR (Progressive Renewal Party). 

The PSB (Brazilian Socialist Party) is highly concentrated in 
the Northeast; nearly half of its fifteen deputies come from Per- 
nambuco. The PC do B (Communist Party of Brazil) is the only 
small party to have elected deputies in all five regions of Brazil 
in 1994. It presents a very dispersed pattern, with ten deputies 
elected in nine states. The PC do B dominated student associa- 
tions (university and high school) in almost all states and was 
able to mobilize these young voters to concentrate their prefer- 
ences on one or two PC do B candidates in each state. 



289 



Brazil: A Country Study 

The delegations of the four parties considered potential 
allies of the government are mostly concentrated in the North, 
Center-West, and South. In 1994 the PMDB's two largest dele- 
gations came from the Southeast (thirty-two) and Northeast 
(thirty). Nonetheless, the PMDB was weakened in those 
regions in the 1994 elections, even though it elected four of 
the nine Northeastern governors (Piauf, Rio Grande do Norte, 
Alagoas, and Paraiba). 

As a result of its electing three of the seven governors in the 
North, the PPR elected the second largest delegation from that 
region. Its second regional concentration was in the South, 
where it was tied with the Workers' Party with twelve deputies. 
The PPR became the second largest delegation in Rio de Jan- 
eiro with seven deputies. Leading defeated coalitions in the 
runoffs in Goias and Brasilia, the Progressive Party became the 
second largest delegation in the Center-West, after the PMDB. 
Its best performances at the state level were in Minas Gerais 
(seven deputies) and in Parana (six deputies). 

Party Legislation 

Because Congress did not pass a new organic law for political 
parties in 1994, political parties until 1995 were regulated by a 
patchwork quilt of legislation: the 1988 constitution, the old 
Organic Law imposed by the military, and a host of individual 
laws passed over the past twenty years, including Election Law 
No. 8,713, passed on September 30, 1993. Parties are consid- 
ered part of public law, and the state regulates and supervises 
them closely. Although Article 17 of the 1988 constitution 
states that parties are free to organize, fuse, incorporate, or dis- 
solve themselves, Paragraph 2 of the same article states that 
after parties acquire a "legal personality" under civil law they 
may then register their statutes. Although Paragraph 1 states 
that parties are free to organize themselves internally, in reality 
they are governed by a detailed, complex, and often conflicting 
set of legal rules. 

After 1985 provisional organization of new parties became 
easier: 101 members of the party sign a petition with bylaws, 
statutes, and a program, which are registered with the TSE 
(Superior Electoral Court). Definitive registry is more compli- 
cated; within a twelve-month period, the new party must orga- 
nize state directorates in nine states and in one-third of the 
municipalities in each of these states. 



290 



Government and Politics 



In late August 1995, Congress finally passed the new Organic 
Law of Political Parties, which had been under consideration 
since 1989. This law imposed stiffer criteria for the registration 
of new parties, stated that party switchers might lose their man- 
date, and established a "weak" threshold of 3 percent for pro- 
portional elections (parties with less than 3 percent of the valid 
vote would not be allowed to operate in Congress, but those 
elected would be seated). Continuous party switching has been 
a problem in Congress. In the first five months of the 1995 leg- 
islature (February through June), more than forty federal dep- 
uties (8 percent) switched party labels at least once. 

On the final deadline date of October 2, 1995, Law No. 
9,100 was passed and published in the daily record; it regulated 
the municipal elections of October 3, 1996. Some minor 
changes were enacted: a 20 percent quota for female candi- 
dates for city councils; less transparency in campaign finance 
than in 1994; very high limits for campaign contributions (up 
to US$221,000.00 for businesses and US$51,500.00 for individ- 
ual persons); and a return to the 1990 rules on free radio/tele- 
vision time. 

Politics 

Sarney's Presidency, 1 985-90 

The government's strategy of controlling the election of the 
first civilian president in the 1985 electoral college almost 
received a mortal blow on April 25, 1984. On that day, the dire- 
tas jd! constitutional amendment, which called for direct elec- 
tions for president on November 15, 1984, came just twenty-two 
votes shy of the necessary two-thirds majority (320 votes). In 
late June 1984, the Liberal Front dissident group split from the 
military government's PDS (Democratic Social Party) and 
joined the PMDB led by Governor Tancredo Neves (Minas 
Gerais). In the second half of 1984, massive rallies engulfed 
Brazil, as the Tancredo Neves-Sarney ticket consolidated its 
300-vote margin over Paulo Maluf (PDS-Sao Paulo) in the Janu- 
ary 1985 electoral college. 

Sarney got his start in politics in his home state of Maranhao 
in the late 1950s as federal deputy in the progressive wing of 
the National Democratic Union (Uniao Democratica Nacio- 
nal — UDN). A staunch supporter of the 1964 revolution, he 
was able to defeat the PSD (Social Democratic Party) political 
machine in direct elections for governor in 1965, and was 



291 



Brazil: A Country Study 

elected senator by Arena (National Renewal Alliance) in 1970. 
The military government never quite accepted Sarney and 
vetoed his attempts to return to the governorship in 1974 and 
1978. He was also passed over several times for the presidency 
of the Senate and for the post of minister of justice in 1980. As 
a consolation prize, he became president of the PDS. In 1984 
Sarney was one of the dissident leaders of the schism in the 
PDS, and he became Tancredo Neves's running mate. 

Tancredo Neves took ill on the eve of his inauguration on 
March 14, 1985, and died on April 21. Sarney was first sworn in 
as vice president and then acting president within a very loose 
interpretation of the constitutional norms for presidential suc- 
cession. 

Deputy Ulysses Guimaraes had been elected president of the 
Chamber of Deputies on February 1 and by right should have 
assumed the presidency because neither Tancredo Neves nor 
Sarney had been inaugurated. On the death of Tancredo 
Neves, a new indirect election should have been called within 
ninety days. Guimaraes, perhaps sensing that the military 
would not accept this scenario, graciously declined in favor of 
Sarney. 

Sarney's first year was very difficult. He was unprepared to 
assume the presidency and was assisted immediately by General 
Ivan Souza Mendes, director of the National Intelligence Ser- 
vice (Servico Nacional de Informacoes — SNI). In effect, Bra- 
zil's government was an informal parliamentary system during 
1985, with Deputy Guimaraes and PMDB Senate floor leader 
Fernando Henrique Cardoso acting as informal prime minis- 
ters. The Sarney administration moved to consolidate repre- 
sentative democracy in 1985: it legalized the two communist 
parties, the PCB and the PC do B, allowed illiterates to vote, 
and called for direct elections for mayors of all capital cities 
and "national security" municipalities. 

The PMDB performed poorly in the November 15, 1985, 
mayoral elections, when former president Janio Quadros of the 
PTB (Brazilian Labor Party) narrowly defeated Cardoso for 
mayor of Sao Paulo. However, Sarney recovered national pres- 
tige and high standing in the polls following the introduction 
of the Cruzado Plan on February 28, 1986, and began to con- 
solidate his power as president. The PMDB became the great 
"umbrella" party in the 1986 elections, leading a broad coali- 
tion to victory in all states but Sergipe, and electing an absolute 
majority in the ANC (National Constituent Assembly). 



292 



Government and Politics 



Rapid consolidation of democracy in Brazil after 1985 was in 
part slowed by some of the concessions negotiated by Tancredo 
Neves with the military to ensure their support. Tancredo 
Neves agreed that members of the armed forces who had been 
expelled for subversion after 1964 would not receive amnesty 
and reinstatement; that there would be no independent, non- 
congressional Constituent Assembly; and that before the new 
constitution was finished and promulgated, none of the 
authoritarian decrees — National Security Law, antistrike law, 
repressive press law, and limitations on Congress — would be 
canceled or modified. 

By October 1988, Sarney, who was still a nominal member of 
the PMDB, had grown very unpopular because of increasing 
inflation and allegations of corruption. As a result, the PMDB 
lost many cities in the November 15, 1988, municipal elec- 
tions — of the 100 largest cities, the party dropped from seventy- 
seven to twenty mayors, but in 1992 elected twenty-nine; in 
1996 the number fell back to only sixteen (see table 21, Appen- 
dix). In addition, impeachment proceedings were initiated 
against Sarney on charges of corruption. The CPI (Congres- 
sional Investigating Committee) reported in favor of impeach- 
ment, but the measure was not transmitted to the floor of the 
Chamber of Deputies for deliberation. 

During Sarney's presidency, Brazil suffered four austerity 
shock plans and used three currencies. Thus, for the Decem- 
ber 17, 1989, runoff, voters selected the two presidential candi- 
dates who most vociferously criticized the Sarney presidency — 
Collor (PRN) and Lula (Workers' Party). 

Collor de Mello's Presidency, 1990-92 

Collor created extremely high expectations that he could 
solve Brazil's economic problems and that he could insert Bra- 
zil into the international economic arena. With one "silver bul- 
let," he promised to rid Brazil of inflation, rampant corruption, 
and all marajds (literally maharajahs, or do-nothing, corrupt 
high government officials who draw huge salaries), while mod- 
ernizing Brazil's economy and society. 

Collor's ambitious program began by confiscating some 
US$50 billion in financial and bank assets from depositors and 
investors, thereby plunging the country into recession. He set 
about "taking the state apart," announcing that he would 
reduce the number of federal civilian employees from nearly 1 
million to 300,000. Further, he would auction off government 



293 



Brazil: A Country Study 

cars and housing in Brasilia, sell all state enterprises, and begin 
a program to consolidate or eliminate the myriad of federal 
agencies. Collor's style of presidency was similar to that of 
developed countries and included well-orchestrated public 
relations campaigns and lavish entertaining. 

Although he commanded a small minority bloc in Congress, 
Collor's high ratings in the polls and excellent television com- 
munication skills dissuaded many politicians from opposing his 
unusual proposals in an election year. Unlike the Cruzado 
Plan, which had helped Collor's election as governor of Ala- 
goas in 1986, his 1990 stabilization plan did not produce posi- 
tive economic results before the November 15 elections. Most 
of his allied gubernatorial candidates were defeated, and his 
coalition remained a minority in Congress. As inflation 
increased in 1991, the government began to flounder, and the 
opposition was able to thwart many of his proposals. Many of 
his initiatives in the international arena came to naught. 

In late 1991, Collor counterattacked in a media blitz, blam- 
ing constitutional impediments for obstructing his moderniza- 
tion plan and boldly proposing a broad constitutional reform 
package of sixteen amendments. However, in March 1992, as 
new accusations of corruption mounted daily, Collor fired 
almost his entire cabinet (except for the military ministers and 
the ministers of health and education, who were not politi- 
cians) and brought in older, more experienced politicians who 
generally were considered "clean." 

A month later, the president's younger brother, Pedro Col- 
lor, unleashed his bombastic accusations regarding the modus 
operandi of the corruption system, and on June 1, 1992, Con- 
gress installed the impeachment CPI. President Collor, 
together with his adviser, Paulo Cesar Farias, and other cronies 
from Alagoas, had taken office with a "dynasty" strategy in 
mind. As described by Pedro Collor and other CPI witnesses, 
the Collor-Farias administration centralized all corruption, 
demanding 40 percent kickbacks for all government contracts 
and special policy decisions. With a war chest accumulating at 
nearly US$2 billion a year, they apparently expected to bribe 
their way into power for the next twenty years. As the 1993-94 
Budgetgate CPI revealed, this conspiracy had numerous collab- 
orators in Congress and the executive branch. Because the 
1992 impeachment CPI threatened to widen its inquiry, the 
politicians decided to sacrifice Collor quickly to obscure their 
own involvement. 



294 



President Fernando Collar de 
Mello and President George 
Bush during a state visit to the 
White House, Washington, 
June 18, 1991 
Courtesy The White House, 
Washington 



Franco's Presidency, 1 992-94 

Senator Itamar Franco (Liberal Party-Minas Gerais) had 
been chosen as Collor's running mate for three reasons: Minas 
Gerais had the second largest electorate; Franco had led the 
impeachment CPI against Sarney's alleged corruption; and 
Franco was the ideal anti-impeachment "insurance" because of 
his idiosyncratic nature. During the 1989 campaign, Franco 
had threatened to resign several times and later voiced outspo- 
ken opposition to some Collor policies, especially concerning 
privatization. As president, Franco immediately installed a 
politically balanced cabinet and sought broad support in Con- 
gress. 

Franco's presidential style was the opposite to that of Collor. 
A man of more simple habits and tastes, Franco refused the 
imperial, ceremonious presidential role. However, he proved 
to be quite temperamental, and many of his appointments 
were ill-conceived and short-lived. His most serious difficulty 
was defining an optimum economic strategy and selecting a 
minister of finance. He slowed Collor's privatization program 
to a near standstill and reverted to a developmentalist, nation- 
alist model that was based on a national plan to guide the coun- 
try through a series of stages of development, eventually 



295 



Brazil: A Country Study 

culminating in modernization. After successively appointing 
two politicians and an academic economist to head the Minis- 
try of Finance, Franco moved Senator Fernando Henrique Car- 
doso (PSDB-Sao Paulo) from the Ministry of Foreign Affairs to 
Finance in May 1993. 

In October 1993, Congress installed a CPI to investigate its 
own members involved in a far-reaching scandal within the 
joint budget committee. The scandal had begun during the 
Sarney period and extended into Franco's government. In 
addition to investigating possible involvement of some fifty 
members of Congress and identifying the "corrupters" in the 
private sector, the investigations unmasked a conspiracy ring 
within the executive branch that involved several middle-level 
bureaucrats. Distraught by the scandal reaching the executive 
branch, President Franco contemplated resigning. However, 
cooler heads persuaded him not to, and instead the president 
appointed several distinguished citizens to a Special Investigat- 
ing Commission (Comissao Especial de Investigacao — CEI) 
headed by the SAF (Federal Administration Secretariat) chief. 
Some of those involved in corruption were fired. Franco also 
appointed several military officers to civilian positions in the 
Ministry of Transport, Federal Police, and Office of the Federal 
Budget Director, which had difficult problems. 

With Cardoso's PSDB (Brazilian Social Democracy Party) 
team installed at Finance, the Franco government became less 
erratic, and the kitchen cabinet's influence somewhat dimin- 
ished. However, inflation had increased from 25 percent to 45 
percent by April 1994, when Cardoso resigned to run for presi- 
dent, a month after his new stabilization plan went into effect. 

The economic stabilization plan took into account all the 
errors of the Cruzado Plan of 1986, and both Cardoso and his 
team were aware of its potential effect on the 1994 elections. 
Because of the great success of the Real Plan, President 
Franco's approval rating soared to nearly 80 percent at the end 
of his term. The Franco-Cardoso transition was the most tran- 
quil in Brazilian political history. 

Cardoso's Presidency, 1 995- 

Cardoso was inaugurated as president on January 1, 1995, 
under the most auspicious circumstances. He had won an out- 
right victory in the first round of the election and had poten- 
tially strong support blocs in the Chamber of Deputies and 
Senate. He had strong support from a majority of the newly 



296 



President Fernando Henrique 
Cardoso 

Courtesy Brazilian Embassy, 
Washington 




elected governors, including those from the important states of 
Minas Gerais, Sao Paulo, and Rio de Janeiro, which had elected 
governors from the president's own PSDB. Further, the Decem- 
ber 1994 inflation rate was less than 1 percent, unemployment 
was low, and popular expectations ratings were extremely high. 

After his inauguration, Cardoso called the lame-duck Con- 
gress into session in an attempt to pass important legislation 
not acted on in 1994. President Cardoso abolished the CEI, 
which had not yet finished investigating corruption in the 
Franco administration, and transferred its mission to the new 
Internal Control Secretariat (Secretaria de Controle Interno — 
SCI). The Cardoso government pushed privatization and orga- 
nized the sale of the Rio Doce Valley Company (Companhia 
Vale do Rio Doce — CVRD), one of the world's largest mining 
firms; the telecommunications system; and the electricity sec- 
tor. 

In 1995 Congress enacted major constitutional reforms, 
including economic deregulation, eliminating state monopo- 
lies, and changes in election and party legislation. By July 1995, 
the lower house had passed (and transmitted to the Senate) all 
five amendments dealing with the economic area. The amend- 
ments reduced to varying degrees state-held monopolies on 



297 



Brazil: A Country Study 

coastal shipping, natural gas distribution, telecommunications, 
and petroleum, and eliminated the distinction between domes- 
tic and foreign firms in Article 171. 

Perhaps the most important task of the Cardoso government 
in 1995 was to promote the reform of key sections of the 1988 
constitution in order to reduce the role of the state in the econ- 
omy, reform the federal bureaucracy, reorganize the social 
security system, rework federalist relationships, overhaul the 
complicated tax system, and effect electoral and party reforms 
to strengthen the political representation of political parties. In 
February 1995, the new Cardoso government moved quickly to 
initiate constitutional reform by a three-fifths majority of each 
house. 

In the area of political reforms, Congress sought to improve 
Brazil's very weak party system. Congress proposed establishing 
a mixed system, prohibiting coalitions in proportional elec- 
tions, establishing a minimum representation threshold (5 per- 
cent), permitting immediate reelection to executive office, 
imposing more rigid party fidelity norms, restricting party 
access to television and radio time, and establishing stricter 
regulations for campaign finance. 

Women in Politics 

The women's suffrage movement began in Brazil in the early 
1900s. As in the United States, women were first fully enfran- 
chised at the state level. In 1927 in Rib Grande do Norte, the 
state election laws were amended giving women the right to 
vote. A year later, Alzira Soriano was elected mayor of Lajes, 
Santa Catarina State. Finally, the new national election code, 
signed by President Vargas in 1932, allowed women to vote in 
the May 1933 elections for the 1934 Constituent Assembly. Two 
women were elected to that body. 

Many women have been elected mayors. In 1985 Luiza Fon- 
tenelle (Workers' Party) was the first woman elected in a state 
capital (Fortaleza, Ceara). The most important elective office 
held by a woman in Brazil was the mayorship of Sao Paulo, 
which Luiza Erundina (Workers' Party) won in 1988. 

Although women have become federal judges by public 
examination, none has ever been appointed to Brazil's supe- 
rior courts. In 1988 President Sarney appointed the first 
woman to the National Accounting Court. However, this 
appointment was more related to the appointee's notorious 



298 



Government and Politics 



journalist husband than to her judicial qualifications (see Gen- 
der, ch. 2). 

By 1994 women constituted nearly half of the electorate. In 
August 1994, data from the TSE (Superior Electoral Court) 
showed that of 94,782,410 registered voters, 49.4 percent were 
women. 

No women were elected to Congress in the 1946-51 period, 
but Getulio Vargas's niece, Ivette Vargas, was elected federal 
deputy from Sao Paulo in 1950 at age twenty-three. Women 
continued to have minuscule representation in Congress and 
in state assemblies until the political opening (abertura) in 
1982, when nine women were elected to the Chamber of Depu- 
ties, followed by twenty-six in 1986, twenty-three in 1990, and 
thirty-six in 1994. Among the latter, Vanessa Cunha (PSDB-Rio 
de Janeiro) was the youngest federal deputy at age twenty-two. 
Among state deputies, seventy-nine women were elected in 
1994. 

The first female senator assumed office in 1979 as an alter- 
nate on the death of her predecessor. Since then a few women 
have been elected to the Senate in successive elections. In 1994 
fourteen women were candidates for the Senate, and four were 
elected. 

In 1996 Congress adopted a quota system (20 percent) for 
female candidates for city council, and this policy increased the 
number of women elected. In 1997 Congress extended the 
mechanism to the 1998 general elections. 

Until 1994 no women had been elected governor in their 
own right. When the governor of Acre resigned to run for the 
Senate in 1982, Yolanda Fleming was appointed governor to 
serve out the last ten months of the term. In 1994 eleven 
women ran for governor, and three made it into the second- 
round runoff — Angela Amin (PPR — Santa Catarina), Lucia 
Vania of the Progressive Party, and Roseana Sarney (PFL-Mara- 
nhao). Sarney, a daughter of the former president, was elected 
by a very small margin. 

In 1994 women became candidates for vice president for the 
first time. The PMDB chose Iris Rezende, wife of the Goias gov- 
ernor, to be Orestes Quercia's running mate. Although 
Rezende, a Protestant, had never held a formal political office, 
she was very active in politics while first lady of Goias. With her 
candidacy, the PMDB hoped to attract the growing number of 
Protestant voters. Not to be outdone, the PPR chose Gardenia 
Goncalves from Maranhao as a running mate for Senator Espe- 



299 



Brazil: A Country Study 

ridiao Amin. Goncalves's husband had been a governor and 
senator from Maranhao, in opposition to the Sarney group, 
and in 1992 she was elected mayor of the capital city, Sao Luis. 

Figueiredo (president, 1979-85) was the first president to 
name a woman to a cabinet position — Professor Esther 
Figueiredo Ferraz (no relation to the president) as minister of 
education and culture. His successors also appointed female 
cabinet ministers, the most famous of whom was Zelia Cardoso 
de Melo, President Collor's minister of economy. President 
Franco's cabinet included three women. President Cardoso 
appointed one woman during his first year in office, but she 
was replaced by a man in 1996. 

The Electoral System 

Since independence Brazil has experimented with almost 
every possible electoral system: single and multimember dis- 
tricts, and proportional representation with various formulas. 
Only the so-called mixed systems are yet to be tried. Election 
day is always a national holiday. Until 1965 national and state 
elections were held on October 3, but the military moved the 
date to November 15 (Day of the Republic, a military holiday). 
The constitution of 1988 reestablished October 3 (ninety days 
before the inauguration of executive-branch elected officials) 
for the first round of voting, and November 15 for runoff elec- 
tions when needed. As of 1998, first-round elections will be 
held on the first Sunday in October and runoff second rounds 
on the last Sunday of October. 

Brazilian election laws are very complex and detailed. The 
law requires that all candidates who hold executive positions 
resign six months before the election (see The Legislature, this 
ch.). No "write-in" candidacies are allowed; only candidates 
officially presented by a registered political party may partici- 
pate. Parties choose their candidates in municipal, state, or 
national conventions. Although the legislation does not recog- 
nize party primaries officially, on occasion they have been used 
informally. 

Voting is considered both a right and a duty in Brazil; thus, 
registration and voting are compulsory between the ages of 
eighteen and seventy. Illiterates vote, but their voting registra- 
tion card identifies their status, and they sign the voting list 
with a fingerprint on election day. The 1988 constitution low- 
ered the voting age, permitting sixteen- and seventeen-year- 
olds to vote on a voluntary basis. In 1994 these young voters 



300 



Government and Politics 



(who cannot legally drink or drive) totaled 2,132,190 (2.2 per- 
cent of the electorate). For these reasons, turnouts for all elec- 
tions in Brazil are very high, usually more than 85 percent. At 
certain times, voters have cast blank and void ballots as a means 
of protest, especially in 1970, when military oppression was at 
its height. 

Before 1966 individual paper ballots were used for each 
office, and the voter placed the appropriate set in an envelope, 
which was inserted into the ballot box. Since 1966 unified sin- 
gle ballots have been used for simultaneous elections. In 1996 
fifty-one of Brazil's largest cities used a new electronic voting 
machine with great success. In 1998 some 90 million voters will 
use this new technique, which may become a hot export item. 
For majority elections, candidates' names are listed in random 
order, and the voter must mark the respective box. For propor- 
tional elections, the voter can write the name or identification 
(ID) number of the candidate, or write the symbol or ID num- 
ber of the party preference. There is no alternative to making a 
straight party vote for all offices on the ballot. This procedure 
is extremely complicated for voters with little schooling. In 
elections in the first half of the 1990s, many voted for one or 
two executive offices and left the rest of the ballot blank. 

Before Congress adopted Law No. 8,713 in September 1993, 
there were few restrictions on campaign finances. Businesses 
and labor unions could not make political contributions. Indi- 
vidual persons could contribute to parties, but not to individual 
candidates. Parties were required to submit their accounting to 
the TSE (Superior Electoral Court), countersigned by each 
other. In 1994 contributions from individual businesses (but 
not labor unions) were legalized, and electoral bonus (bonus 
eleitoral) receipts were issued to contributors, who have often 
used them to evade taxes. 

In 1994 Law No. 8,713 also required parties and candidates 
to submit to the electoral courts detailed balance sheets listing 
contributors and expenses. These reports were made public 
and hastily analyzed by the press. Cardoso's presidential cam- 
paign listed expenses of nearly R$32 million, about one real per 
vote, and contributions from banks, large construction firms, 
and businesses. 

Brazil has four types of majority elections: the president, gov- 
ernors, and mayors are elected by absolute majorities; senators, 
by simple majorities. In elections for president, governors, and 
mayors of cities with more than 200,000 voters, a runoff is 



301 



Brazil: A Country Study 

required between the top two candidates if no one receives an 
absolute majority in the first round (50 percent plus at least 
one vote). The president, governors, and mayors have their 
respective vice president, vice governors, and vice mayors, who 
are elected on unified slates. 

The May 1994 constitutional revision reducing the presiden- 
tial term from five to four years unified the terms of the presi- 
dent, state governors, and Congress. State and national 
elections are scheduled for 1998 and 2002, two years out of 
phase with municipal elections, which are set for 1996 and 
2000. 

Three senators are elected by simple majority to represent 
each of the twenty-six states and the Federal District. They are 
elected to alternating eight-year terms: one seat will be con- 
tested in 1998 and the other two in 2002. Each senator has an 
alternate elected on a unified ticket, usually from another 
party in the coalition. If the senator elected takes leave, dies, 
resigns, or is expelled, the alternate takes over. 

Brazil uses an open-list d'Hondt proportional representation 
system to elect federal and state deputies and city council mem- 
bers. Each party or coalition selects its list of candidates, which 
is registered with the respective Electoral Court in June. Coali- 
tion partners lose their identity and compete in a single "bas- 
ket" of votes. Coalitions are very important for proportional 
representation elections in Brazil. In 1962 nearly 50 percent of 
federal deputies were elected through coalitions. With the 
surge of new parties created after 1985, coalitions again 
appeared in the 1986, 1990, and 1996 elections. These coali- 
tions accounted for nearly 90 percent of those elected. 

In proportional representation elections, voters have the 
option of making a party vote. Usually, however, the propor- 
tional representation campaigns are so individualized (many 
candidates never mention their party label in their propa- 
ganda) that the party vote is very small (8 percent in 1994). An 
exception is the Workers' Party, which received 33 percent of its 
votes for federal deputy as party votes in 1994. 

Elections 

The Presidential Election of 1 989 

The 1989 presidential election, the first direct presidential 
election since 1960, was established by the 1988 constitution. 
The 1988 municipal elections were a preview of the 1989 elec- 



302 



Government and Politics 



tions for the PMDB, the nation's largest party, which lost in 
most cities with a population of more than 100,000. Leonel Bri- 
zola's PDT (Democratic Labor Party) and Lula's Workers' Party 
made considerable gains, as voters made plain their rejection 
of parties associated with the Sarney government. 

As a result of more lenient legislation, twenty-two parties 
qualified candidates for the presidency in 1989. The PRN 
(Party of National Reconstruction) was hastily organized by a 
questionable takeover of the Youth Party (Partido da Juven- 
tude — PJ) to launch the candidacy of Alagoas governor 
Fernando Collor de Mello, who had been elected by the PMDB 
in 1986, and had a brief flirtation with the PSDB in late 1988. 
Six of the major candidates were closely associated with the Sar- 
ney period or with the Big Center in the ANC (National Con- 
stituent Assembly). 

By June 1989, Collor, aided by numerous television appear- 
ances, had close to 50 percent of voter preference. His other 
advantages in this election included his antiparty and antiestab- 
lishment posture; his being relatively unknown politically; a 
huge war chest of campaign funds, efficiently collected by cam- 
paign treasurer, Paulo Cesar Farias; a fleet of fifteen Lear jets at 
his disposal for campaigning; a sophisticated campaign organi- 
zation; and his good communication and oratory skills, 
acquired while working at the family television station in 
Maceio. 

In the first round of voting, Collor received 28.5 percent of 
the votes and Lula, 16.1 percent, slightly edging out Brizola in 
a close third (see table 22, Appendix). In the second round, 
Lula managed to pull ahead of Collor in the polls by some 5 
percent in the last ten days of the campaign. However, because 
of Collor's negative campaign attacks against Lula, the election 
swung in Collor's favor by a 5.7 percent margin (see table 23, 
Appendix). Collor's geographic vote distribution was very simi- 
lar to that of the PDS (Democratic Social Party) — the smaller 
the city, the larger Collor's proportion of the vote. 

Congressional and State Elections, 1 990 

Although President Collor had been able to pass most of his 
emergency legislation in 1990, he knew that his government 
needed to elect a solid majority to Congress, backed up by sym- 
pathetic governors. The economic stabilization plan adopted 
in March 1990 produced a deep recession, which was not 
reversed before the October 3 general elections. The 1988 con- 



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Brazil: A Country Study 

stitution had created three new states — Amapa, Roraima, and 
Tocantins — and home rule came to Brasilia, which elected its 
first governor. Thus, twenty-six states and the Federal District 
held simultaneous elections for governor, state assemblies, the 
full 503-member Chamber of Deputies, and thirty-one senators 
(the new states of Amapa and Roraima elected three senators 
each). 

Seventeen of the gubernatorial races had runoffs on Novem- 
ber 15. Among the twenty-seven governors elected, Collor had 
four staunch allies, eleven sometime allies, and twelve in oppo- 
sition. Parties nominally aligned with Collor had elected close 
to an absolute majority (252) of federal deputies, but because 
of low party loyalty and cohesion, the president had great diffi- 
culty passing his legislative agenda in 1991 (see table 24, 
Appendix). The PMDB (Brazilian Democratic Movement 
Party) remained the largest party in Congress, retaining the 
presidency of the Senate. However, in 1993 the PMDB lost the 
presidency of the Chamber to a PFL-led coalition. Nineteen 
parties gained representation in the lower house. 

Municipal Elections, 1992 

The 1992 municipal elections were held five days after Col- 
lor's impeachment. The PMDB recovered some positions lost 
in 1988. The PFL (Liberal Front Party), PSDB, and PDS (Dem- 
ocratic Social Party) also made moderate advances. 

General Elections, 1 994 

The 1994 elections were significant because the presidential 
election coincided with the general elections for governor, sen- 
ator, and federal and state deputy for the first time since 1950. 
It was expected that a strong presidential showing would have 
strong coattails (see Glossary) at the state level. However, many 
thought that election results proved otherwise. Coalition-build- 
ing was generally inconsistent between the national and state 
levels, because local political animosities and affinities were so 
diverse from state to state that none of the presidential coali- 
tions could cover all the possible combinations. Among the 
major parties, the PFL, PTB (Brazilian Labor Party), and Pro- 
gressive Party decided not to field separate presidential candi- 
dates. The PMDB, PDT (Democratic Labor Party), PPR 
(Progressive Renewal Party) , Workers' Party, and PSDB decided 
to run their own candidates. Four minor parties — the Liberal 
Party (Partido Liberal — PL), National Order Redefinition 



304 



Brasilia, at night 
Courtesy Brazilian Embassy, Washington 

Party (Partido da Redefinicao da Ordem Nacional — Prona), 
PRN (Party of National Reconstruction), and Social Christian 
Party (Partido Social Cristao — PSC) — also nominated candi- 
dates. 

Despite opposition from a minority, the PMDB nominated 
former Sao Paulo governor Orestes Quercia as its presidential 
candidate. The PDT again nominated Leonel Brizola. Lula's 
Workers' Party articulated a broad coalition on the left, includ- 
ing the Brazilian Socialist Party (Partido Socialista Brasileiro — 
PSB), Popular Socialist Party (Partido Popular Socialista — 
PPS), PC do B (Communist Party of Brazil), and Green Party 
(Partido Verde — PV) . However, Marxist wings of the Workers' 
Party, having gained control of the party's Executive Commit- 
tee, imposed a difficult, radical platform on the campaign. 

Cardoso had become minister of finance in May 1993 and 
had assembled the same PSDB economic team that had formu- 
lated the Cruzado Plan in 1986. This time, however, the team 
put together a stabilization plan that included the components 
missing in 1986. The hope was that the initiative would boost 
Cardoso's potential candidacy into the second round. In Febru- 
ary 1994, Congress approved the Real Value Units (Unidades 



305 



Brazil: A Country Study 

Reais de Valor — URVs; see real (R$) in Glossary) Stabilization 
Plan, which gave the minister of finance almost absolute power 
to impound or reallocate budgeted funds, reduce the fiscal def- 
icit, and conduct a rescheduling of the foreign debt. 

The impact of the RealVlm on the preference polls was even 
more dramatic than PSDB strategists had imagined. They had 
thought that, at best, if the plan were a success, Cardoso might 
pull even with Lula by the end of August, thus guaranteeing a 
second round in November. However, Cardoso surpassed Lula 
in the Datafolha firm's presidential preference poll results at 
the end of July by successfully branding the Workers' Party as 
against the Real Plan and for inflation. Cardoso went on to win 
the election outright on the first round with 54.3 percent of the 
valid votes cast (44.1 percent of the total vote, including blank 
and null ballots) (see table 25, Appendix). Lula placed second 
with 27.0 percent. Cardoso's PSDB-PFL-PTB coalition received 
additional support from the PMDB and PPR, which abandoned 
their candidates and climbed aboard the Cardoso bandwagon. 
In addition to electing the president and a majority of the gov- 
ernors, the Center coalition returned substantial majorities to 
Congress. 

The social-liberal alliance, the Big Center, that elected Car- 
doso on the first round enjoyed only moderate presidential 
coattails at the state level (see table 26, Appendix). The PSDB- 
PFL-PTB alliance elected nine (33 percent) governors, twenty- 
four of fifty-four (44 percent) senators up for election, 182 of 
513 (35 percent) federal deputies, and 324 of 1,045 (31 per- 
cent) state deputies. Cardoso placed first in every state except 
the Federal District (Brasilia) and Rio Grande do Sul. Lula sur- 
passed Cardoso in the Federal District and Rio Grande do Sul, 
where his coattails pulled the Workers' Party gubernatorial can- 
didates into the second round. 

The 1994 gubernatorial election was the fourth in a series of 
direct elections for governor since their reinstatement in 1982. 
Compared with 1990, the PSDB had the best performance of 
all parties in 1994. The PSDB was formed hastily in June 1988, 
and in 1990 elected only one governor (Ceara). In 1994 the 
PSDB won six governorships, including Minas Gerais, Sao 
Paulo, and Rio de Janeiro. These three states account for 
nearly 60 percent of Brazil's gross national product (GNP — see 
Glossary) and tax base. Certainly, presidential coattails and the 
Real Plan were important factors in these three second-round 
victories. Brizola's PDT lost the three states won in 1990, but in 



306 



Government and Politics 



1994 elected the governors of Parana (Jaime Lerner) and Mato 
Grosso (Dante de Oliveira), both on the first round. The Work- 
ers' Party made it into the second round in three states and 
won in two: Brasilia and Espirito Santo. The two victories gave 
the Workers' Party a chance to demonstrate how it would man- 
age a state government. The party had already elected mayors 
in major cities (Sao Paulo, Porto Alegre, and Belo Horizonte) 
in 1988 and 1992. 

Of the fifty-four Senate seats up for election in 1994, only 
nine incumbents were reelected. Six of the twenty-seven sena- 
tors elected in 1990 were replaced by their respective alternates 
(five were elected to other offices and one died). Thus, in 1995 
fifty-one of the eighty-one senators were new, although five of 
the latter had served in the Senate before 1990. The PMDB, 
PFL, and PSDB continued to have the largest upper-house del- 
egations; and the PFL made substantial gains (see table 27, 
Appendix) . The most significant change was the advance of the 
left. From only two senators in 1991, this group increased to 
seven (five from the Workers' Party). The PPS, the former PCB 
(Brazilian Communist Party) , elected its first senator (Roberto 
Freire) since Luis Carlos Prestes was elected in 1945. 

The Chamber of Deputies was enlarged in 1995 with the 
expansion of the Sao Paulo State delegation from sixty to sev- 
enty as mandated by the 1988 constitution. Turnover in the 
lower house in 1995 (275 new deputies out of 513, or 53.6 per- 
cent) was slightly lower than that in 1991. As in 1991, the 
Chamber of Deputies in 1995 continued to have two larger par- 
ties (PMDB and PFL) and six middle-sized parties. By electing 
deputies in all five regions of Brazil, these eight parties, as well 
as the PC do B, have a more national representation. 

Voter turnout was lower in 1994 (82.2 percent) than in 1989 
(88.1 percent), and blank and null votes were more frequent in 
1994 than in 1989. These differences may have resulted in part 
from the fact that the 1994 election was more complicated, 
with two ballots and six offices. 

Municipal Elections, 1996 

On October 3, 1996, voters in 5,581 municipalities chose 
mayors and city councils. Only thirty-one cities held runoff 
elections on November 15. Big gains were made by the PSDB 
and the PFL, which took the cities of Rio de Janeiro, Salvador, 
and Recife for the first time, while a divided PMDB declined 
considerably. Paulo Maluf elected his successor as mayor of Sao 



307 



Brazil: A Country Study 

Paulo, thereby reinforcing his future political ambitions. On 
the left, the Workers' Party suffered reverses, and the PSB 
advanced. 

Generally, issues were local and not national, and women 
had increased participation, boosted by the new 20 percent 
quota rule for proportional elections. About 142 federal depu- 
ties decided to run in these local elections, but only forty-two 
won and thus left the Congress. The apparent desire for admin- 
istrative continuity enhanced the arguments in favor of the 
reelection amendment. 

Interest Group Politics 

Brazil has very intense and diversified interest groups. 
Before 1964 the most visible were labor unions, student organi- 
zations, and business groups, which exercised their pressures 
more on Congress than on the executive branch. During the 
military period, especially from 1969 to 1974, interest groups 
continued to operate but almost exclusively vis-a-vis the execu- 
tive branch. In 1983, when it became apparent that a political 
transition would take place, Congress again became the focal 
point of interest groups. The most explicit example of this 
trend was the ANC (National Constituent Assembly), when lit- 
erally thousands of lobbyists — one researcher catalogued 121 
noninstitutional groups — descended on Brasilia. 

Interest Groups 

Government institutions lobby the executive and legislative 
branches through their legislative liaisons and employee associ- 
ations. The president's office maintains a Subsecretariat for 
Congressional Relations. State enterprise employee associa- 
tions, such as those of the Brazilian Petroleum Corporation 
(Petroleo Brasileiro S.A. — Petrobras) and the Brazilian Electric 
Power Company, Inc. (Centrais Eletricas Brasileiras S.A. — 
Eletrobras), have very active lobbying organizations, as do fede- 
ral employees. All states and many large cities maintain perma- 
nent representation offices in Brasilia. Although strictly 
prohibited, military officers exerted heavy pressure on the gov- 
ernment for better salaries in 1992-94 through protest 
marches by military families. 

In 1983 the Interunion Parliamentary Advisory Department 
(Departamento Intersindical de Assessorial Parlamentar — 
DIAP) was founded to coordinate and unify the lobbying 



308 



Government and Politics 



efforts of the labor movement. The DIAP represented 517 
unions, nine confederations, and one central federation in 
1992. The DIAP soon proved highly efficient in monitoring leg- 
islative activities, publishing profiles of the performance of 
congressional members, and identifying friends and enemies 
of workers. In the 1991-94 period, the party leadership's 
manipulations attempted to thwart DIAP monitoring by floor 
voting, and very few roll-call votes were taken during that ses- 
sion. 

Since the 1930s, business groups have been organized into 
umbrella federations at the state level and confederations at 
the national level, such as the Sao Paulo State Federation of 
Industries (Federacao das Industrias do Estado de Sao Paulo — 
FIESP) and the National Confederation of Industry (Confeder- 
acao Nacional das Industrias — CNI). Other businesses are 
organized as national associations by sector: the Brazilian Asso- 
ciation of Radio and Television Companies (Associacao 
Brasileira das Empresas de Radio e Televisao — ABERT), the 
Brazilian Electro-Electronic Industry Association (Associacao 
Brasileira da Industria Eletro-Eletronica — ABINEE), and the 
Brazilian Aluminum Association (Associacao Brasileira de 
Alummio — ABAL). Business groups mounted a very efficient 
lobbying operation in support of the Big Center during the 
ANC. 

Professional groups, such as associations of medical doctors, 
lawyers, pharmacists, and engineers, are usually more active 
regarding the regulation of their professions, but occasionally 
attempt to influence more generalized economic and social 
legislation. Since the 1970s, there has been a steady growth of 
urban social movements and groups concerned with issues 
such as the prevention and treatment of acquired immune 
deficiency syndrome (AIDS) , racial prejudice, consumer rights, 
ecology, the homeless, Indians, mortgages, street children, and 
tenants. As a result, there has been a parallel growth of nongov- 
ernmental organizations (NGOs). Some NGOs are considered 
aggregative, such as the Brazilian Institute of Social and Eco- 
nomic Analysis (Instituto Brasileiro de Analise Social e 
Economica — IBASE) in Rio de Janeiro, or the Institute of 
Socioeconomic Studies (Instituto de Estudos Socio-Economi- 
cos — Inesc) in Brasilia. Some are more issue-focused, such as 
the Center for Indian Rights (Nucleo de Direitos Indfgenos — 
NDI) in Brasilia, or SOS Atlantic Forest (SOS Mata Atlantica) 
in Rio de Janeiro. 



309 



Brazil: A Country Study 

Religious groups are also important. The Roman Catholic 
Church acts officially through the National Conference of Bra- 
zilian Bishops (Conferencia Nacional dos Bispos do Brasil — 
CNBB). However, it has an unofficial far right wing in the Bra- 
zilian Association of Tradition, Family, and Property 
(Sociedade Brasileira de Defesa da Tradicao, Familia e Pro- 
priedade — TFP), and an unofficial left wing of liberation theol- 
ogy linked to the Ecclesiastical Base Communities 
(Comunidades Eclesiais de Base — CEBs) (see Glossary). The 
center and left had always elected the president and general 
secretary of the CNBB since its inception. However, in May 
1995 conservative Prime Bishop-Cardinal Lucas Moreira Neves 
was elected president of the CNBB, a consequence of Pope 
John Paul IPs consistent appointment of conservative bishops 
in Brazil. The Protestants have their Order of Evangelical Min- 
isters (Ordem dos Ministros Evangelicos — OME) and Political 
Action Evangelical Group (Grupo Evangelico de Acao 
Polftica — GEAP) . 

The Lobbying Process 

Three basic styles of lobbying are found in Brasilia: the inter- 
est group sends its own representatives to Brasilia, when the 
legislative agenda warrants; the interest group has its own rep- 
resentatives permanently installed in Brasilia; or the group 
contracts with lobbyists in Brasilia to represent its interests. Pro- 
fessional lobbyists systematically monitor the activities of Con- 
gress and the executive branch regarding legislative agendas 
and procedures. Visits by groups and individual interests to 
strategic members of Congress are organized frequently. In 
some cases, the deputies' geographical vote profiles for the last 
election within their state are analyzed for the client. When the 
interest group has a large membership, bus caravans to Brasilia 
are organized to pressure Congress or the executive branch. 

As in many legislatures, the Brazilian Congress also has 
inside lobbyists; that is, Chamber of Deputies or Senate staff, 
and some members themselves (the so-called single-issue dep- 
uty or senator) . Because staff are very important to the legisla- 
tive process, they are cultivated assiduously by lobbyists, and 
many become sensitive to (or eventually agents for) certain 
interest groups. In response to these pressures, the Chamber of 
Deputies Research Staff Association began preparing a Code of 
Ethics in 1993. 



310 



Government and Politics 



Campaign contributions are local and are an integral part of 
the lobbying process. The Ministry of Finance issues electoral 
bonus receipts for campaign contributions. Many contributing 
businesses, however, have used these receipts to evade taxes by 
providing documentation for their bogus records, known as 
their caixa dois (second set of books). Several bills have been 
introduced to address this problem, but no legislation had 
been passed by early 1997. The Chamber of Deputies allows 
groups to receive lobbying credentials. In the 1991-92 session, 
thirty-nine groups (twenty-eight business groups) received cre- 
dentials, in addition to all ministries and sixteen other public- 
sector agencies. The Senate does not offer credentials. 

The Media 

Print and electronic media play a very important role in Bra- 
zilian politics. Until the 1988 constitution, the president had 
the exclusive prerogative to allocate radio and television con- 
cessions. From 1985 through 1988, television and radio conces- 
sions became the "currency of political negotiation" as 
President Sarney tried to maintain majorities in Congress. 
Although "social control" over concessions and renewals is 
called for in the new constitution, no such action had been 
taken until Cardoso's new minister of communications, Sergio 
Motta, served notice in 1995 that all pending concessions 
would be canceled and a National Social Control Commission 
would be established that would use different criteria. 

Shortly after radio arrived in Brazil in the 1930s, President 
Vargas initiated weekday transmissions of the Voice of Brazil, as 
propaganda on government operations. The news show, which 
emphasizes activities in and around government and political 
circles, carries thirty minutes of news from the executive 
branch and thirty minutes from Congress and the judiciary. 

Media owners have very definite political agendas and pur- 
sue them assiduously. Francisco de Assis Chateaubriand Ban- 
deira de Melo built the first media empire in Brazil. He 
founded the Diarios Associados newspaper chain in the 1930s, 
and in the 1950s established a media empire that included 
thirty-three newspapers, eighteen magazines, the Tupi Network 
(with twenty-five radio and eighteen television stations), and 
two news agencies. Chateaubriand exercised tremendous coer- 
cive power over businessmen, presidents, governors, and Con- 
gress. As a result of losing a political and judicial battle against 
the rise of the TV Globo Network, Tupi deteriorated after Cha- 



311 



Brazil: A Country Study 

teaubriand's death in 1968. The military government finally 
confiscated and reallocated its concessions in 1981. The news- 
paper chain still exists but with less central coordination. 

The second media empire and the most powerful one in 
1997, Globo Organizations (Organizacoes Globo), began with 
the Rio newspaper Globo, founded by Irineu Marinho in the 
1920s. In 1931 the oldest son, Roberto Marinho, assumed con- 
trol of the newspaper and still commanded the empire in 1997 
at age eighty-five. Globo began radio transmissions in 1944, 
and TV Globo began in Rio de Janeiro in 1965, the latter under 
a controversial technical assistance agreement with the Time- 
Life Group that generated a CPI. 

With the establishment of a microwave and later satellite 
national hookup by the Brazilian Telecommunications Com- 
pany (Empresa Brasileira de Telecomunicacoes — Embratel) in 
1970, the Globo network steadily advanced to cover all states. 
The network accounts for approximately 70 percent of televi- 
sion audience ratings and advertising billings in Brazil. 

In 1993, 333 daily newspapers had a total circulation of 
about 2.5 million. Magazines sold 222 million copies in 1993 
(1.47 per inhabitant), down 32 percent from 1991. Although 
per capita newspaper circulation and readership is very low in 
Brazil, research has shown that print media have considerable 
influence on politics because of very competent investigative 
reporting and exposes, influence among "opinion leaders," 
and influence on other media. Of the five national newspa- 
pers — O Estado de Sao Paulo, Folha de Sao Paulo, Gazeta Mercantil, 
O Globo, and Jornal do Brasil — members of Congress regarded 
Gazeta Mercantil as the least biased paper, according to a May 
1995 survey. 

Radio and especially television exert a tremendous direct 
influence over the voting behavior of the vast majority of Brazil- 
ians. When the TSE (Superior Electoral Court) completed a 
massive computerized voter registration before the 1986 elec- 
tions, it classified 70 percent of those registered as "illiterate or 
semi-illiterate." Brazilian television has an insidious influence 
on these nearly 60 million voters. Political subplots are cleverly 
woven into television soap operas (telenovelas) and situation 
comedies to jaundice public opinion about certain political 
groups and types of politicians. Biased news coverage of politi- 
cal campaigns is commonplace. 



312 



Government and Politics 



Foreign Relations 

The Foreign Service 

The Rio Branco Institute (Instituto Rio Branco — IRBr) 
recruits from twenty to thirty candidates each year among col- 
lege graduates. After four semesters of intensive study of lan- 
guage and diplomacy, graduates receive a certified bachelor of 
arts degree in diplomacy and begin their careers as third secre- 
taries. In 1996 the IRBr began studies to upgrade the course to 
an M.A. program. The IRBr teaching staff is composed of 
senior diplomats and some academics from the University of 
Brasilia (Universidade de Brasilia). Some foreign students are 
admitted, mostly from Latin America and Africa. 

After three or four years experience within several divisions 
of the Ministry of Foreign Affairs (known as Itamaraty, after the 
building it formerly occupied in Rio de Janeiro), the junior 
diplomat is posted overseas. Promotion to second and first sec- 
retary is by merit (evaluation by immediate superiors). Before 
promotion to minister second class, the diplomat goes through 
a mid-career course and produces a monograph, which is 
defended before an examining board. Many diplomats also 
acquire graduate degrees during their career. Promotion to the 
final positions of counselor (minister first class) and ambassa- 
dor involves a combination of merit and political consider- 
ations; the president makes the final decision. Because 
Itamaraty has more diplomats than posts overseas and in 
Brasilia, diplomats frequently fill key positions in other minis- 
tries, state enterprises, and the president's office. Brazilian dip- 
lomats generally are considered skilled and patient negotiators 
by their peers. 

Foreign Policy Decision Making 

Most foreign policy strategies and decisions originate within 
Itamaraty. A senior diplomat always occupies the position of 
foreign affairs adviser within the president's office, and diplo- 
mats occupy similar liaison positions in key ministries. Since 
the 1980s, Itamaraty, in response to the growing complexity of 
foreign policy issues, has established new divisions dealing with 
export promotion, environmental affairs, science and technol- 
ogy, and human rights. Itamaraty also established the Interna- 
tional Relations Research Institute (Instituto das Pesquisas das 
Relacoes Internacionais — IPRI) as part of the Alexandre 



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Brazil: A Country Study 

Gusmao Foundation, which functions as a think tank and con- 
ference center and publishes foreign policy studies. 

The Senate and Chamber of Deputies each have foreign 
affairs standing committees. Under the 1988 constitution, the 
Senate expanded its treaty approval prerogative to include all 
international financial agreements, such as negotiations with 
the International Monetary Fund (IMF — see Glossary) and 
international banks, which in the past had been the exclusive 
prerogative of the executive branch (see The Military in the 
Amazon, ch. 5). The Congress also has involved itself in major 
government contracts with foreign companies, such as the con- 
tract with Raytheon for an Amazon surveillance system. 

The Brazilian Cooperation Agency (Agenda Brasileira de 
Cooperacao — ABC), a foreign aid agency formally established 
in the late 1980s, coordinates all international technical coop- 
eration and assistance received by Brazil from foreign donors 
(often, but not always, within the context of bilateral agree- 
ments). For example, in the absence of a United States-Brazil 
bilateral agreement, United States Agency for International 
Development (USAID) programs in Brazil are not coordinated 
through the ABC. The ABC also coordinates Brazilian interna- 
tional technical cooperation and assistance directed to other 
countries, mostly through South-South relationships con- 
ducted by Brazilian government agencies, universities, and 
NGOs. 

At times other agencies may take the lead in foreign policy 
decision making. For example, in June 1995 the economic sec- 
tor, led by the Ministry of Planning, made the initial decision to 
impose quotas on imported automobiles. This decision pro- 
voked a crisis within the Common Market of the South (Mer- 
cado Comum do Sul — Mercosul; see Glossary) — because 
Argentine automobile exports to Brazil would have been 
affected. Itamaraty intervened, and a solution was negotiated 
excepting Mercosul from the rigors of the measure. 

The military had the final say on foreign policy during the 
1964-85 period, when foreign policy was decided frequently 
within the National Security Council (Conselho de Seguranca 
Nacional — CSN). Since then the military occasionally has exer- 
cised some influence. When the United Nations (UN) 
requested Brazilian troops for a peacekeeping force in 
Namibia during the delicate, pre-election phase of transition in 
1991, Itamaraty was favorable, but the army vetoed the initia- 
tive. The reverse occurred in 1995. After a successful peace- 



314 



Government and Politics 



keeping mission in Mozambique in 1993-94, the army, in 
search of new missions, approved sending a battalion to the 
peacekeeping operation in Angola. However, for reasons of 
economic austerity the ministries of Planning and Finance 
delayed the appropriation until 1996. 

Multilateral Relations 

Brazil was a founding member of the League of Nations (see 
Glossary) in 1920 and the UN in 1945, and has chaired the UN 
Security Council on several occasions. Brazil is also an active 
participant in the Organization of American States (OAS; see 
Glossary), IMF, World Bank (see Glossary), Inter-American 
Development Bank (IADB; see Glossary), African Develop- 
ment Bank (ADB), World Trade Organization (WTO, which 
now administers the General Agreement on Tariffs and 
Trade — GATT; see Glossary), International Commodity Orga- 
nization (coffee, cocoa beans), and Antarctic Treaty. Interna- 
tional pressures have been strong on Brazil to join certain 
agreements, such as the Non-Proliferation Treaty (NPT), which 
Brazil announced its decision to sign on June 20, 1997. Brazil 
joined the Missile Technology Control Regime (MTCR — see 
Glossary) in October 1995. 

Brazil has participated in UN peacekeeping operations since 
the Suez Crisis in 1956. A Brazilian contingent participated in 
the UN observer force that guaranteed the October 1994 elec- 
tions in Mozambique, and in the UN observer force in Bosnia 
in 1995. Regarding the latter, a Brazilian general commanded a 
force of 680 observers, of whom thirty-four were Brazilians. In 
May 1995, two Brazilian officers were among the several hun- 
dred UN observers captured by the Bosnian Serbs and used as 
human shields against further NATO bombings. The number 
of Brazilian personnel attached to UN peacekeeping opera- 
tions has gradually declined from 1,166 in August 1996 to forty- 
eight in September 1997. Because of its active participation in 
UN activities and its status as a middle-level emerging eco- 
nomic and political power, Brazil aspires to a permanent seat 
on the Security Council, if and when membership in this body 
is expanded. 

Latin America 

Brazil's first circle of international relations is with its Latin 
American neighbors. Being the largest nation in the region 
makes this process somewhat delicate. Most border issues were 



315 



Brazil: A Country Study 

settled in the late nineteenth and early twentieth centuries, but 
some questions concerning the borders with Bolivia, Colom- 
bia, Paraguay, and Venezuela remain. In 1995 Brazilian farmers 
and forest gatherers penetrated Bolivia's Pando Department, 
in an action reminiscent of the invasion of Acre by Brazilian 
rubber tappers in the 1890s. Brazil regularly extends export 
credits and university scholarships to its Latin American neigh- 
bors. A certain quota of Latin Americans are admitted to the 
Rio Branco Institute and the armed forces staff schools. 

An active participant in regional security activities, Brazil 
hosted the conference that established the Inter-American 
Treaty of Reciprocal Assistance (Rio Treaty) in 1947. In addi- 
tion, Brazil was a founding member of the OAS in 1948 and has 
participated in several OAS peacekeeping endeavors. Most 
notable was Brazil's participation in the Inter-American Peace 
Force (Fuerzas Interamericanas de Paz — FIP) in the Domini- 
can Republic in 1965. In the 1980s, Brazil was an active partici- 
pant in the Contadora Support Group (see Glossary), which 
sought a permanent peace in Central America. In June 1995, 
eighty-seven Brazilians were attached to peacekeeping opera- 
tions in the Americas — thirty-seven in El Salvador, thirty-two in 
Nicaragua, ten on the Ecuador/Peru border, six in Honduras, 
and two in Guatemala. 

The Treaty of Asuncion — signed in 1991 by Brazil, Argen- 
tina, Uruguay, and Paraguay — was the culmination of a rap- 
prochement betw r een Brazil and Argentina after 160 years of 
regional rivalry (see Trade Patterns and Regional Economic 
Integration, ch. 3). It also incorporated Uruguay and Paraguay 
into Mercosul, and Bolivia and Chile joined Mercosul in 1996. 

Europe 

During the period from the 1970s to 1995, the relative 
importance of the European Economic Community (EEC; now 
the European Union — EU) as a trading partner with Brazil was 
reduced, but increased in the mid-1990s. By 1995 German 
investments in Brazil were second only to the United States, but 
Britain, Italy, and France also have important investments, 
mostly in industrial manufacturing, heavy equipment and auto- 
mobiles, and consumer goods. In mid-1995 negotiations 
advanced toward establishing a free-trade association between 
the EU and Mercosul. In December 1995, the EU signed an 
important free-trade protocol with Mercosul, the first ever 
between two regional trading blocs. Since then Brazil has 



316 



A Brazilian Air Force Hercules C-130 transport plane 
Courtesy Brazilian Embassy, Washington 

adroitly used the EU card to force a slowdown of the United 
States pressure to "fast track" the Free Trade Area of the Amer- 
icas (FTAA) expansion of the North American Free Trade 
Agreement (NAFTA). 

Relations with the EU are economically important, but even 
more so from a North-South political perspective. Brazil and its 
Mercosul partners want to strengthen their trading bloc to 
include not only Chile but also Bolivia, Colombia, Ecuador, 
Peru, and Venezuela before 2005, to be able to negotiate as a 
bloc with NAFTA, as opposed to bilateral negotiations as 
favored by the administration of President William Jefferson 
Clinton. The United States view is that 2005 is the date for the 
FTAA to be "fully operational," whereas Brazil and its Mercosul 
partners view the year 2005 as a "starting point" for the FTAA 
process. 

The Middle East 

Immigrants from the Middle East began arriving in Brazil in 
large numbers in the twentieth century, especially following 
World War I. These immigrants spread throughout Brazil but 



317 



Brazil: A Country Study 

can be found mostly in the Southeast region, where many are 
merchants. 

Brazil's economic relations with the Middle East were accel- 
erated by the 1973 petroleum crisis. Brazil tried to maintain a 
moderate stance vis-a-vis the Arab-Israeli conflict and sup- 
ported all UN peace initiatives. In late 1973, Brazil established 
embassies in Iraq and Saudi Arabia and legations in Libya and 
Kuwait, and it signed cooperation agreements with Egypt, 
Israel, and Iraq. 

However, in 1975, because of the deepening petroleum crisis 
and in search of petrodollar investments, Brazil tilted its for- 
eign policy in favor of the Arab (Palestinian) cause in three 
crucial votes in the UN. Brazil's military government upgraded 
its representation in Iraq by appointing a succession of four- 
star generals as ambassadors to Baghdad. When the Iran-Iraq 
War broke out in 1979, nearly 35 percent of Brazil's oil imports 
were coming from Iraq. In 1981 it was reported that Brazil had 
sold low-grade uranium ore or yellow cake (see Glossary) to 
Iraq. 

The Iraq-Kuwait conflict, which resulted in Operation 
Desert Storm in early 1991, placed Brazil in a very delicate posi- 
tion. United States congressional subcommittees accused Bra- 
zil of exporting technology and expertise to Iraq to develop a 
missile based on the Piranha missile (MAA-1). Retired Air 
Force Brigadier Hugo Oliveira Piva had taken a private group 
of Brazilian technicians to Baghdad to complete this project; 
under pressure, the Collor government ordered the group's 
return to Brazil. 

At the time of Desert Storm, a Brazilian construction com- 
pany, Mendes Junior, had several hundred workers and techni- 
cians, as well as several million dollars worth of equipment, in 
southern Iraq working on railroad and irrigation projects. 
Thus, Brazil, unlike Argentina, did not participate in the Allied 
operation. The Brazilian government had to dispatch its key 
negotiator, Ambassador Paulo de Tarso Flecha de Lima, from 
his post in London to negotiate the release of the Mendes 
Junior personnel from Iraq and the disposition of the equip- 
ment. Brazil had won a US$5 billion price and performance 
competition to supply its Osorio tank to Saudi Arabia in 1990, 
but the Kuwait conflict changed the decision in favor of the 
United States Abrams tank. 



318 



Government and Politics 



Africa 

Brazil's relations with Africa date from the beginning of the 
slave trade in the seventeenth century. By the middle of the 
nineteenth century, many former slaves had returned to West 
Africa and had become prosperous merchants and entrepre- 
neurs, and regular shipping lines and commerce flourished 
from Bahia. After 1945 Brazil maintained a low-profile position 
in the anticolonialism debate in the UN, but supported the 
positions of Portugal, Belgium, France, and Britain. In 1961 
President Janio Quadros's new independent foreign policy 
made some timid advances in favor of independence for the 
remaining colonies in Africa. During the Goulart period 
(1961-64), Brazil took contradictory positions, especially 
regarding Portugal. Brazil's main contacts with the newly inde- 
pendent nations of West Africa involved price-fixing attempts 
within the International Coffee Organization. The Castelo 
Branco administration (1964-67) sent two commercial mis- 
sions to Africa, the Costa e Silva administration (1967-69) 
opened an embassy in Abidjan (Cote d'lvoire) and one in Kin- 
shasa (Zaire). 

Nonetheless, the opening to Africa really began during the 
presidency of Emflio Garrastazu Medici (1969-74). In Novem- 
ber 1972, Foreign Minister Mario Gibson Barbosa visited nine 
West African countries. In 1973 Brazil voted in favor of antico- 
lonialism measures in the UN. This vote and follow-up trade 
missions resulted in numerous bilateral agreements and Bra- 
zil's participation in the ADB (African Development Bank). 
South African companies made considerable investments in 
Brazil, especially in mining. Brazil's exports to Africa jumped 
from US$90.4 million in 1972 to US$1.96 billion in 1981, and 
its imports from US$152.9 million to US$1.98 billion. 

Brazil's opening to Africa was consolidated during the Geisel 
period (1974-79), which coincided with the emancipation of 
the five Portuguese colonies in Africa. Brazil recognized the 
independence of Guinea-Bissau and Cape Verde in July 1974, 
before it was conceded by Portugal. In November 1975, Brazil 
became the first Western nation to recognize the indepen- 
dence of Angola, under the revolutionary government of the 
Popular Movement for the Liberation of Angola (Movimento 
Popular de Libertacao de Angola — MPLA), and to establish an 
embassy in Luanda. Brazil's stance caused much consternation 
for the United States because the MPLA government in Angola 
was socialist and dependent on the communist bloc and Cuba 



319 



Brazil: A Country Study 

at that time. That same month, Brazil established relations with 
the government in Mozambique because of its strategic impor- 
tance in southern East Africa and the Indian Ocean. Within 
the context of the Cold War and Brazil's anticommunist mili- 
tary government, this decision was a bold move on the part of 
the Geisel government. However, Brazil placed considerable 
importance on establishing relations with African countries. It 
was hard hit by the 1973-74 petroleum crisis and desired access 
to West African oil exports in particular. The petrodollars thus 
earned were used to buy Brazilian exports of manufactured 
goods through Petrobras International Trade, Inc. (Petrobras 
Comercio Internacional S.A. — Interbras). 

Over the next twenty years, Brazil established very close rela- 
tions with the lusophone or Portuguese-Speaking African 
Countries (Paises Africanos de Lingua Oficial Portuguesa — 
PALOPs). In addition to Angola and Mozambique, these 
included Sao Tome e Principe, Cabo Verde, and Guinea-Bissau. 
The Rio Grande do Sul Airline (Viacao Aerea Rio-Grandense 
do Sul — Varig) established regular flights to Lagos, Nigeria; 
Abidjan; Luanda, Angola; and Maputo, Mozambique. However, 
in the early 1990s flights were suspended to Lagos (to control 
drug traffic) and Maputo. President Figueiredo (1974-85) was 
the first Brazilian president to visit Africa (five countries in 
November 1983). Brazilian construction companies undertook 
hydroelectric and infrastructure projects, and Petrobras signed 
risk contracts for oil exploration. 

By 1986 Brazil had twenty-two embassies in the region, and 
President Sarney continued the expansion of relations with 
Africa, visiting Cape Verde in 1986 and Angola in 1989. African 
heads of state from Algeria, Zaire, Cape Verde, and Mozam- 
bique, as well as Sam Nujoma of the South West African Peo- 
ple's Organization (SWAPO), also visited Brasilia. By 1985 
commerce between Africa and Brazil had grown to US$3.3 bil- 
lion. 

In the context of the independence of Namibia in 1990, the 
UN requested a Brazilian battalion to participate in peacekeep- 
ing operations, but Brazil refused, saying that the army was not 
prepared and the government lacked resources for such a ven- 
ture. However, when the UN asked for Brazilian army and 
police participants in peacekeeping operations during the 
October 1994 election in Mozambique, the Itamar Franco gov- 
ernment was quick to oblige. In 1995 the Cardoso government 
sent a full engineering battalion to Angola to participate in UN 



320 



A Brazilian Army Peacekeeping Force embarking for Angola 
A Brazilian Army patrol in Mozambique 
Courtesy Brazilian Embassy, Washington 

321 



Brazil: A Country Study 

operations (minesweeping and infrastructure rebuilding). In 
1996 President Cardoso made a short visit to Angola en route 
to a longer state visit to South Africa. 

Asia 

Before 1960 Brazil maintained diplomatic relations with 
three Asian nations: Japan, India, and Nationalist China (Tai- 
wan). In that year, Brazil established ties with the Republic of 
Korea (South Korea) and Ceylon (now Sri Lanka). In August 
1961, President Quadros sent his vice president, Joao Goulart, 
to the People's Republic of China as head of a commercial del- 
egation. In August 1974, Brazil broke relations with Taiwan and 
established full relations with China, four years before the 
United States. The Nationalist diplomats were evicted uncere- 
moniously from the Chinese embassy in Brasilia to make way 
for the new tenants. 

In the 1970s and 1980s, relations with Asia expanded to ten 
embassies in Brasilia. Because of the growing importance of 
the newly industrialized countries in the Pacific Basin, Brazil 
installed a legation in Singapore. Although not a major trading 
partner, India became an important South-South ally in inter- 
national forums, such as the UN Conference on Trade and 
Development (UNCTAD), GATT, and the Group of 77 (G-77). 

With its gradual economic opening to the West, mainland 
China has become an important trading partner for Brazil 
since the 1980s. Petrobras began oil exploration under risk 
contract, and engineering services were contracted for mining 
and hydroelectric ventures. In addition, the Chinese have pur- 
chased large quantities of Brazilian iron ore and steel plate. 

However, Japan has received the highest priority within the 
region. Brazil established diplomatic relations with Japan in 
1897. The first Japanese immigrants arrived in Brazil in 1908, 
as the Sao Paulo coffee planters sought alternative free labor 
after the abolition of slavery in 1888. This influx of Japanese 
immigrants continued until 1934, when the new constitution 
limited foreign immigration to 2 percent of the past fifty years. 
Diplomatic relations broke off during World War II, but 
resumed in 1952. Some 100 years after the first waves of immi- 
gration, Brazilians of Japanese descent constitute one of the 
largest ethnic segments of Brazil's population. 

In the 1960s, Japan began to invest heavily in various sectors 
in Brazil, including mining, steel, aluminum, telecommunica- 
tions, manufacturing, and agricultural ventures (the latter in 



322 



Government and Politics 



the Central Highlands plateau region and the Amazon). In 
return, Japan imported large quantities of iron, other nonfer- 
rous ores, unfinished steel and aluminum products, and soy- 
beans and other agricultural products. 

In the 1980s, with cycles of recession and decreasing employ- 
ment opportunities in Brazil, a reverse immigration flux began; 
some 200,000 Brazilians of Japanese descent traveled to Japan 
in search of jobs. Their monthly remittances to their families 
remaining in Brazil have become an important item in bilateral 
commerce. 

In 1992 Japanese companies invested US$1.4 billion in Bra- 
zil in the areas of telecommunications, capital goods, mining, 
and metallurgy. The Japan International Cooperation Agency 
(JICA) has sponsored many rural colonization projects in Bra- 
zil since the 1950s. In 1995 JICA was using Brazilian technicians 
and installations to train people from developing countries in 
Latin America and Africa in industrial job training, community 
development, education, and so forth. 

In mid-1995 the Socialist Republic of Vietnam signaled a 
desire for closer trade relations with Brazil, thus eliminating 
Thailand as middleman. President General Le Due Anh visited 
Brazil and the Brazilian foreign minister visited Vietnam in the 
second half of 1995. Brazil's opening to Vietnam was made 
within the context of Brazil's general Southeast Asian strategy 
and its view that Vietnam may soon become an "Asian Tiger." 

United States 

The United States was the first nation to establish a consu- 
late in Brazil in 1808, following the transfer of the Portuguese 
royal court to Rio de Janeiro and the subsequent opening of 
the ports to foreign ships. However, it was not until after World 
War II that the United States became Brazil's number-one trad- 
ing partner and foreign investor. After 1945 United States-Bra- 
zil relations took on five basic dimensions: promoting and 
protecting United States investments in and exports to Brazil; 
promoting Brazil's exports of primary goods or products (see 
Glossary) and supporting Brazil's industrialization policies; gar- 
nering Brazil's support for United States policy positions in the 
hemisphere and in other world forums; promoting Brazil's 
emergence as a middle-level world power in Latin America and 
the developing world; and showcasing Brazil's successful inde- 
pendent foreign policy and autonomous development strategy 
among its peers in the developing world. 



323 



Brazil: A Country Study 

During the presidency of Enrico Gaspar Dutra (1946-51), 
Brazil's foreign policy was aligned closely with that of the 
United States. Brazil outlawed the PCB (Brazilian Communist 
Party) in 1947 and broke off relations with the Soviet Union. 
Vargas's return to power in 1951 signaled a cooling of rela- 
tions. Vargas blamed the United States for his ouster in 1945 
and appealed to Brazilian nationalism, which was growing in 
many sectors, including the armed forces. The Korean War and 
the European recovery were then high United States priorities. 
Brazil was not at the time threatened by communism, and 
United States arms sale policies equated formerly pro-Axis 
Argentina with Brazil. Brazil's foreign policy of actively promot- 
ing its agricultural exports, whose terms of trade (see Glossary) 
were diminishing, ran counter to United States interests. The 
establishment of the Petrobras oil monopoly in 1953 crowned 
these nationalist sentiments and was hailed as an economic 
declaration of independence from United States oil compa- 
nies. These sentiments were further fanned by charges of 
United States involvement in Vargas's ouster and suicide in 
August 1954. His suicide note blamed "international economic 
and financial groups." 

President Kubitschek (1956-61) improved relations with the 
United States, while strengthening relations with Latin Amer- 
ica and Europe, and exploring market possibilities in Eastern 
Europe. His industrial development policy attracted huge 
direct investments by foreign capital, much from the United 
States. He proposed an ambitious plan for United States devel- 
opment aid to Latin America in 1958 (Operation Panamerica). 
The outgoing administration of President Dwight D. Eisen- 
hower found the plan of no interest, but the administration of 
President John F. Kennedy appropriated funds in 1961 for the 
Alliance for Progress (see Glossary) . 

Relations again cooled slightly after President Quadros 
announced his new independent foreign policy in January 
1961. Quadros also made overtures to Cuba and decorated 
Cuban revolutionary Ernesto "Che" Guevara with Brazil's high- 
est honor. 

Severe economic problems, political and economic national- 
ism, union populism, and strained relations with the United 
States frustrated President Goulart, eventually causing his over- 
throw in 1964. Before assuming the presidency, Goulart was 
known for having been a Vargas protege and for being pro- 
Fidel Castro, procommunist, and antiforeign capital. However, 



324 



Government and Politics 



during the first parliamentary period (September 1961 to Feb- 
ruary 1963) of his presidency, Goulart tried to maintain close 
relations with the United States by naming strongly pro-United 
States Roberto Campos as ambassador in Washington and Dep- 
uty Santiago Dantas as minister of foreign affairs. Nonetheless, 
certain domestic and foreign policy issues clouded this rela- 
tionship. First, Goulart's brother-in-law, Leonel Brizola, then 
governor of Rio Grande do Sul, insisted on expropriation of 
foreign-owned public utilities (electric power and telephones), 
and nationalists in Congress pushed for zero or minimum com- 
pensation. Second, Brazil joined Argentina, Bolivia, Chile, 
Ecuador, and Mexico in abstaining from a final vote on an OAS 
resolution expelling Cuba from that organization. Third, in 
August 1962, Congress approved a more restrictive law govern- 
ing profit remittances, and new foreign investments dwindled 
to almost zero in early 1964. 

In late 1963, Washington, alarmed that Brazil might become 
a hostile, nonaligned power like Egypt, reduced foreign aid to 
Brazil. The exact United States role in the March 31, 1964, mil- 
itary coup that overthrew Goulart remains controversial. How- 
ever, the United States immediately recognized the new 
interim government (before Goulart had even fled Brazilian 
territory); a United States naval task force anchored close to 
the port of Vitoria; the United States made an immediate large 
loan to the new Castelo Branco government (1964-67); and 
the new military president adopted a policy of total alignment 
with the United States. 

The Castelo Branco regime broke off relations with Cuba 
(while enhancing them with the Soviet Union and Eastern 
Europe); purged or exiled leftists and alleged communists; 
adopted a more discreet position in the UN vis-a-vis Portuguese 
colonialism; duly compensated expropriated foreign capital 
investments; passed a new profit remittances law; and sent a 
1,200-man battalion as part of the Interamerican Peace Force 
to the Dominican Republic in 1965. Brazilian foreign policy 
centered on combating subversion and contributing to the col- 
lective security of the hemisphere. Brazil ranked third after 
Vietnam and India as recipients of United States aid; it received 
US$2 billion from 1964 to 1970. Nonetheless, Castelo Branco's 
all-out support for United States policies only served to 
increase anti-Americanism rather than to lessen it. 

Divergence and some hostility characterized relations dur- 
ing the Costa e Silva period (1967-69). Brazil perceived that 



325 



Brazil: A Country Study 

United States leadership in the global struggle was faltering 
because of the winding down in Vietnam, making it more diffi- 
cult for Brazil to support United States positions in world 
forums. In 1969 the Richard M. Nixon administration assumed 
a low-profile policy with Latin America. Washington provided 
less economic aid and fewer arms shipments to Brazil and 
sharply reduced its military mission in Brazil (from 200 in 1968 
to sixty in 1971). 

Although Costa e Silva did not turn to economic nationalism 
and the climate for foreign investments remained generally 
favorable, Brazil asserted its independence in other ways. It 
withdrew support from the Interamerican Peace Force, 
declined to sign the NPT (Non-Proliferation Treaty), tried to 
organize a Latin American nuclear community, assumed a lead- 
ership role in the nonaligned G-77, and increased Soviet-Bra- 
zilian trade. Nevertheless, Costa e Silva paid a state visit to 
Washington in 1967, and in 1969 Brazil sided with the United 
States against the nationalization of oil properties by the Peru- 
vian military government. 

The Medici and Geisel governments (1969-79) generally fol- 
lowed the same course of increasingly independent foreign 
policy combined with friendly relations with the United States. 
Brazil sought to pursue its own advantages by leaving open its 
nuclear options, greatly expanding trade with the Eastern Bloc, 
recognizing the Beijing government four years before the 
United States normalized relations with mainland China, and 
asserting a 322-kilometer maritime zone (always referred to by 
Brazilians as "200 miles") contrary to United States policy and 
fishing interests. 

Brazil's policies emphasized North-South issues over the 
East-West conflict. Brazil took the lead in organizing commod- 
ity cartels (coffee, sugar, and cocoa). In 1975 Brazil voted for 
the UN resolution equating Zionism with racism and did not 
condemn the Soviet and Cuban intervention in Angola. 

The Nixon administration remained basically sympathetic to 
Brazilian hopes for growth and world power status, and consid- 
ered Brazil to be one of the developing world nations most 
sympathetic to the United States. In February 1976, Secretary 
of State Henry Kissinger and Minister of Foreign Affairs 
Antonio Azeredo da Silveira signed a memorandum of under- 
standing that the two powers would consult on all issues of 
mutual concern and would hold semiannual meetings of for- 
eign ministers. Brazil had signed similar agreements with Brit- 



326 



President Fernando Henrique Cardoso meets with President William 
Jefferson Clinton during a state visit to the White House, 

Washington, April 20, 1995. 
Courtesy The White House, Washington 

ain, France, and Italy in 1975. Only Brazil and Saudi Arabia, 
aside from the major Western allies, had such an agreement 
with the United States. Although these agreements had no 
great practical consequences, they indicated a changed United 
States policy of wooing Brazil. 

The Carter administration marked a definite cooling of 
United States-Brazil relations. The confrontation involved two 
very sensitive issues — human rights and nuclear proliferation. 
In 1967 Brazil had signed a contract with Westinghouse to 
build a 626-megawatt nuclear power station at Angra dos Reis, 
Rio de Janeiro State, to be completed in 1977. In 1973-74 the 
petroleum crisis jolted Brazil into a high-priority policy of seek- 
ing alternative energy sources (hydro, solar, alcohol, biogas, 
Bolivian natural gas, and nuclear) . However, the United States 
Nuclear Regulatory Commission renounced its guarantee of 
delivery of enriched uranium, casting doubts on the value of 



327 



Brazil: A Country Study 

nuclear cooperation with the United States, which had prohib- 
ited Westinghouse from constructing enrichment and repro- 
cessing plants in Brazil. 

Brazil, desiring independent control of the full cycle from 
ore to kilowatts, signed a broad nuclear agreement with West 
Germany in June 1975. It involved furnishing technology and 
equipment for eight nuclear power plants, plus enrichment 
and reprocessing facilities. Despite safeguard provisions, some 
thought this agreement opened the door for Brazil to con- 
struct nuclear weapons, if desired. The Ford administration 
reacted only mildly to the agreement, but from his first day in 
office, President Carter sought to prevent its implementation. 

In 1975 the United States Congress mandated that the 
Department of State produce a general report on human 
rights performance by all recipients of United States military 
assistance. The section of the report dealing with Brazil noted 
some improvements and described violations as mildly as possi- 
ble. This report might have gone unnoticed if the United 
States Embassy had not delivered a copy to the Foreign Office 
in Brasilia just hours before its release in Washington. This ges- 
ture, intended as a courtesy, was interpreted as an intolerable 
interference in Brazil's internal affairs. The next day, Brazil 
renounced the United States-Brazil Military Assistance Agree- 
ment, which had been in effect since 1952, and some military 
nationalists pushed for breaking diplomatic relations. Formal 
relations between the two military organizations have still not 
been reestablished. 

The Reagan administration made ostensible gestures to 
improve relations with Brazil. A former military attache to Bra- 
zil during the 1964 coup, retired General Vernon Walters was 
dispatched to Brasilia to express United States concern over 
the Cuban-supported guerrilla movement in El Salvador and to 
request support and assistance. Brazil listened politely, but 
then refused to join the military governments of Argentina, 
Uruguay, and Chile in support of the Salvadoran government. 
Moreover, it increased trade credits to Nicaragua and signed 
several large trade agreements with the Soviet Union. 

In the early 1980s, tension in United States-Brazil relations 
centered on economic questions. Retaliation for unfair trade 
practices loomed on the horizon and threatened Brazilian 
exports of steel, orange juice, commuter aircraft, frozen chick- 
ens, shoes, and textiles. The United States criticized Brazil for 
its trade restrictions and unfair practices (in the area of phar- 



328 



Government and Politics 



maceutical patents and restrictions on United States computer 
giants), and for its US$5 billion trade surplus with the United 
States. Brazil replied that it needed desperately to maintain 
large balance of payments surpluses to meet its foreign debt 
obligations. 

When President Sarney took office in March 1985, political 
issues, such as Brazil's arms exports to Libya and Iran, again 
surfaced. Brazil's foreign debt moratorium and its refusal to 
sign the NPT caused the United States Congress to put Brazil 
on its mandated blacklist, thereby restricting Brazil's access to 
certain United States technologies (see Nuclear Programs, ch. 
6). On taking office in March 1990, President Collor sought a 
quick rapprochement with the United States in order to begin 
an aggressive policy of inserting Brazil into the world economy 
and placing it at the negotiating table of world powers. Collor 
concluded a nonproliferation agreement with Argentina, 
which was registered with the International Atomic Energy 
Agency in Vienna. He moved to deactivate Brazil's autonomous 
nuclear project and the nuclear submarine project, as well as 
the air-to-air Piranha missile project. He also gained congres- 
sional approval for eliminating the market reserve on com- 
puter products and beginning tariff reductions. Collor 
abolished the National Intelligence Service (Servico Nacional 
de Informacoes — SNI) and the National Security Council 
(CSN), and fashioned a Strategic Affairs Secretariat (Secretaria 
de Assuntos Estrategicos — SAE) with a civilian head. However, 
after a year in office the Collor government concluded that 
these overtures had been in vain. Reciprocity by the United 
States was not forthcoming, and Brazilian policies reverted to a 
more pragmatic, independent approach. 

The Franco administration maintained an even more inde- 
pendent stance and reacted coolly to proposals by the Clinton 
administration for a Latin American free-trade zone. Brazil 
pushed ahead with its Satellite Launch Vehicle (Veiculo Lanca- 
dor de Satelite — VLS) program, based in Alcantara, Maranhao. 
Because Brazil wants to participate in the very lucrative satellite 
launching market, it had consistently refused, until October 
1995, to sign the MTCR (Missile Technology Control Regime), 
which it believed restricted developing nations from attaining 
access to this technology. In June 1995, the Israeli military 
attache in Brasilia denounced Brazil for continuing sales of 
Astros II surface-to-surface missile launchers and heavy bombs 
to Libya, despite UN embargoes. In October 1995, after contin- 



329 



Brazil: A Country Study 



uous pressure from the United States, Brazil finally met the 
conditions to join the MTCR and was accepted as a member. 
Brazil joined the MTCR because it was necessary to gain access 
to crucial rocket technology to finalize the VLS IV and to 
ensure that it would become operational in 1997. 

Relations with the Cardoso government in 1995-97 were 
good. Cardoso made a very successful trip to Washington and 
New York in April 1995, and the Clinton administration was 
very enthusiastic regarding the passage of constitutional 
amendments that open the Brazilian economy to increased 
international participation. The United States was especially 
pleased with the break-up of state monopolies in the petro- 
leum and telecommunications sectors. However, the United 
States called for increased efforts to stem international drug 
smuggling across Brazil's territory from Andean neighbors, 
and better coordination between the United States Drug 
Enforcement Administration (DEA) and Brazilian authorities. 
In April 1995, Brasilia and Washington signed a new coopera- 
tion agreement. 

Related to the problem of surveillance of drug smuggling 
across the Amazon region was the controversial Amazon 
Region Surveillance System (Sistema de Vigilancia da 
Amazonia — Sivam) contract. In the 1970s and 1980s, Brazil 
had installed three air surveillance and traffic control systems 
in the South (Sul), Southeast, and Northeast, purchased from 
Thomson CSF, the French electronics manufacturer. In the 
1990s, several international consortiums, including Thomson 
CSF, hotly contested the proposed Sivam contract (worth 
US$1.5 billion). A timely visit by United States Secretary of 
Commerce Ron Brown in June 1994 heavily influenced the 
decision, and two days after his departure, the Brazilian gov- 
ernment decided in favor of a consortium led by the American 
firm Raytheon, instead of Thomson CSF. United States incen- 
tives included very favorable Export-Import Bank financing 
and assurance that Raytheon would participate in the privatiza- 
tion of the Brazilian Aeronautics Company (Empresa Brasileira 
Aeronautica — Embraer), which never happened. 

In 1995, before the final signing of the contracts with Ray- 
theon, Brazil's Congress, under pressure from environmental 
groups and the governors of the Amazon region, decided to 
review the decision process and contract details. Under intense 
pressure from the United States Embassy in Brasilia, however, 
the Brazilian Senate and Chamber of Deputies finally approved 



330 



Government and Politics 



the plan in May 1995, over protests from the governors from 
the Amazon region. 

In response to United States criticism over its unfair trade 
practices and its failure to protect intellectual property rights, 
Brazil finally signed a new patent protection law in March 1996. 
The new law includes protection for pharmaceutical patents 
and contains a "pipeline" mechanism. The United States also 
looks to Brazil to fulfill its longstanding commitments to enact 
legislation on computer software and semiconductor layout 
design, and to introduce amendments to its copyright laws. 

* * * 

The best general treatments of the Brazilian political scene 
are Ben Ross Schneider's Politics Within the State: Elite Bureau- 
crats and Industrial Policy in Authoritarian Brazil, Robert Wesson 
and David V. Fleischer's Brazil in Transition, Glaucio A.D. 
Soares's Sociedade e politica no Brasil, Riordan Roett's Brazil: Poli- 
tics in a Patrimonial Society, Ronald M. Schneider's Order and 
Progress: A Political History of Brazil, and Thomas E. Skidmore's 
Politics in Brazil and The Politics of Military Rule in Brazil 

Good descriptive works on the structure of the Brazilian 
government are not available. For a specific treatment of Con- 
gress, see Abdo I. Baaklini's The Brazilian Legislature and the 
Political System. There are few adequate treatments of state and 
local governments. There is also a dearth of publications on 
the process of the political opening (abertura) and transition in 
Brazil. Keith S. Rosenn's Whither Brazil: The Consolidation of 
Democracy in Brazil after the Impeachment of President Collor is a col- 
lection of papers on the Collor period. The only publication to 
record Itamar Franco's presidency was written by his stalwart 
adviser, Ferreira de Castro, and is entitled Itamar: homen que 
redescobriu o Brasil Although the influence of media on politics 
is extremely important in Brazil, few thorough analyses exist. 
Fernando Morais's Chato, o rei do Brasil describes the empire 
built by Assis Chateaubriand in the 1940s and 1950s. 

Helgio Trindade edited a very good collection of papers on 
election reform in the 1990s, entitled Reforma eleitoral e represen- 
tacao politica no Brasil dos anos 90. There has been considerable 
scholarship published on Brazilian political parties. Fleischer 
edited two volumes of studies on the 1945-79 period, entitled 
Os partidos politicos no Brasil. Maria D'Alva Gil Kinzo's Brazil: The 



331 



Brazil: A Country Study 

Challenges of the 1990s and Jairo Marconi Nicolau's Multiparti- 
darismo e democracia are more recent analyses. 

There is considerable scholarship on Brazil's international 
relations. In his memoirs, A lanterna na pdpa, former Ambassa- 
dor Roberto Campos provides an overview since Bretton 
Woods. Mercosul has a growing bibliography, most notable of 
which is a compilation by the new Brazilian Council of Interna- 
tional Affairs (Conselho Brasileiro de Relacoes Internacio- 
nais), entitled Mercosul. Other useful works on Mercosul 
include Luiz Alberto Moniz Bandeira's Estado nacional e politica 
internacional na America Latina, and Rubens Barbosa's America 
Latina em perspectiva. Rubens Ricupero's Visoes do Brasil: Ensaios 
sobre a historia e a insercao internacional do Brasil is an excellent 
account by one of Brazil's most distinguished diplomats. 
Finally, Brazil-United States relations have received consider- 
able attention. Frank D. McCann's The Brazilian-American Alli- 
ance gives an overview from the early 1900s. W. Michael Weis's 
Cold Warriors and Coups d'Etat reviews the Cold War period. 
Maria Helena Tachinardi's A guerra das patentes analyzes the 
computer and intellectual property rights confrontations. (For 
further information and complete citations, see Bibliography.) 



332 



A nineteenth-century wood carving made by an indigenous Brazilian tribe, 
from Hjalmar Stolpe, Amazon Indian Designs from Brazilian and Gui- 
anan Wood Carvings 



BRAZIL'S ARMED FORCES (Forcas Armadas) have played an 
active political role ever since they helped overthrow the 
empire in 1889. From 1930 until 1964, they asserted their mod- 
erating power (poder moderador — see Glossary) and intervened 
frequently in the political process. In 1964 the military ousted 
the civilian president and governed for twenty-one years. 

A national security doctrine, with two major elements, 
guided the military regime. The first element was a broad defi- 
nition of security that included not only defense against exter- 
nal aggression but also internal defense against insurgency and 
communism. By using repressive measures, the military coun- 
tered domestic insurgencies successfully from 1967 through 
1973. The second element was economic development. Under 
the military, the role of the state in the economy grew consider- 
ably with the expansion of Brazil's industrial base. High eco- 
nomic growth rates of the 1968-73 period helped to legitimize 
military government. 

The armed forces returned to the barracks in March 1985. 
Although they have continued to assert themselves politically, 
their political influence has been reduced substantially because 
of several factors. First, as Brazil has sought to consolidate its 
democracy, the National Congress (Congresso Nacional; here- 
after, Congress) and civilian ministries have become more 
involved and influential in broadly defined security issues. Sec- 
ond, the military was forced to compete with civilian ministries 
for extremely limited resources and was unable to halt a contin- 
ual decline in its share of government expenditures. And third, 
although the 1988 constitution preserves the external and 
internal roles of the armed forces, it places the military under 
presidential authority. Thus, the new charter changed the man- 
ner in which the military could exercise its moderating power 
(see The Military Mission since 1988, this ch.). 

Furthermore, the armed forces were unable to promote and 
fund pet projects effectively in the nuclear, space, missile, and 
armament arenas. President Fernando Collor de Mello (1990- 
92) exposed Brazil's secret, military-sponsored nuclear bomb 
program, the so-called Parallel Program (Programa Paralelo). 
As a result, several of Brazil's nuclear programs were placed 
under international monitoring. Collor also placed the Brazil- 
ian space program controlled by the Brazilian Air Force (Forca 



335 



Brazil: A Country Study 

Aerea Brasileira — FAB) under civilian oversight. In addition, 
the Brazilian government announced in early 1994 that Brazil 
would seek to join the Missile Technology Control Regime (see 
Glossary), and succeeded in doing so in October 1995. Brazil's 
armaments industry, supported by the military regime, col- 
lapsed without any major intervention by the state to shore it 

up- 
Geopolitical changes and a shifting civil-military balance 

within Brazil recast the country's security interests. One geopo- 
litical change in the early 1990s included a transformation 
from bipolarity toward multipolarity in the international sys- 
tem. Another change involved greater integration between Bra- 
zil and Argentina. Political and economic uncertainties in 1995 
also influenced the Brazilian military's perceptions of the 
country's national security. 

Since the 1950s, Brazil's rate of military expenditures has 
been among the lowest in the world. In 1993 this figure 
dropped to only 1.1 percent of the gross national product 
(GNP — see Glossary). This trend reflects the low level of exter- 
nal threat. Brazil is by far the largest country in Latin America 
and enjoys generally good relations with its ten South Ameri- 
can neighbors. There is no threat to Brazil's internal security in 
the narrow sense of insurgencies. The politically inspired ter- 
rorism of the late 1960s and 1970s is nonexistent. 

Despite the low level of defense expenditures, Brazil's armed 
forces are the largest in Latin America, with 314,000 active-duty 
troops and officers in 1997, including 132,000 conscripts. The 
Brazilian Army (Exercito Brasileiro), the largest service 
(accounting for 66 percent of the total armed forces), has 
200,000 active-duty troops and officers. The Brazilian Navy 
(Marinha do Brasil), totals 64,700 members, and the Brazilian 
Air Force (FAB), 50,000. 

With no serious external or internal threats, the armed 
forces are searching for a new role. They are expanding their 
presence in the Amazon under the Northern Corridor (Calha 
Norte) program (see The Military in the Amazon, this ch.). In 
1994 Brazilian troops joined United Nations (UN) peacekeep- 
ing forces in five countries. The Brazilian military, especially 
the army, has become more involved in civic-action programs, 
education, health care, and constructing roads, bridges, and 
railroads across the nation. 

Debate in Brazil concerning national security policy has 
been practically nonexistent. Political dialogue is limited to dis- 



336 



National Security 



cussion of the revisions of the constitution, where only modest 
changes in the role of the armed forces are expected. None of 
the political parties, except the Workers' Party (Partido dos 
Trabalhadores — PT), has articulated a position on defense 
matters. Although some civilians are experts in defense mat- 
ters, their influence is negligible. There is no tradition of con- 
gressional oversight of the military, and the defense-related 
bureaucracy remains minuscule. Civil society continues to show 
a complete lack of interest in issues related to defense. The 
modest attempts by the armed forces to reevaluate their role, 
structure, doctrine, strategy, and tactics are conducted in a vac- 
uum. Some analysts believe that the creation of a ministry of 
defense is a necessary condition for establishing civilian con- 
trol of the military. 

The Military Role in Society and Government 
Early History 

Throughout the colonial era, the Portuguese used military 
forces to defend their vast claims in South America. The typical 
practice was to depend on local fighters and on expeditionary 
forces sent to deal with particular crises. Such forces usually 
were led by nobles and large landowners who recruited, often 
forcibly, unemployed men for the ranks. In addition, the Portu- 
guese long made use of mercenaries from various nationalities, 
a practice that would continue into the early nineteenth cen- 
tury. Colonial warfare against the French, and especially the 
Dutch (1624-54), the continuous wars and slave-raiding expe- 
ditions against the native peoples, and the famous bandeirante 
(see Glossary) expeditions produced a vibrant body of military 
traditions. However, the colonial era did not produce an insti- 
tutionalized standing military force. 

Thanks to the reforms of Marques de Pombal, Portugal's 
emperor, in the mid-eighteenth century, more Brazilian-born 
men were drawn into colonial administration — more so than 
was the case in either the Spanish or the British colonies — 
including military affairs. Portugal did not have a navy or a 
large permanent army, so it had to depend on Brazilians to 
defend their lands. It was only after 1764 that regular royal 
troops were posted in Brazil, and even their ranks had to be 
filled out with local recruits. By the late eighteenth century, the 
officers of the regiments in Bahia were 60 percent Brazilian- 
born, but their attitudes, interests, and values were identical 



337 



Brazil: A Country Study 

with the rest of the colonial elites; they were part of the Portu- 
guese empire, not officers in a budding Brazilian army. Their 
identification was more with their local region or the greater 
Portuguese empire than with what is now Brazil. 

The colonial units were segregated by color. Militia units 
called Henriques (see Glossary) were composed of free blacks, 
while those of mixed African-European ancestry, called pardos, 
had their own organizations and officers. Local bosses, then 
called mestres de campo (country masters), and later known as 
coronets (colonels — see Glossary), organized the white elite and 
their hangers-on into urban and rural militia units. In the 
countryside, such units were really private armies that rein- 
forced the power of the local elites. With royal authority 
behind them, the mestres and coronets chased criminals and run- 
away slaves, kept track of who passed through their territories 
and how much their neighbors produced, and meted out jus- 
tice as they saw fit. The viceroy was too far away to interfere 
with abuses. 

Lieutenant Colonel Henrique Oscar Wiederspahn, in his 
study of Brazil's war with the United Provinces of the Rio de la 
Plata (1825-28) over what is now Uruguay, observed that "the 
Brazilian Armed Forces have their origins in those [forces] that 
Dom Joao VI left us on returning with his Court to Lisbon. ..." 
Dom Pedro I (emperor, 1822-31) used the army and navy to 
expel the Portuguese forces that remained loyal to the govern- 
ment in Lisbon after September 1822. In the campaigns of the 
1820s to expel the Portuguese from Rio de Janeiro, Salvador, 
and Maranhao, the role played by foreign mercenaries, such as 
British Admiral Thomas Alexander Cochrane (Lord Dun- 
donald) and Frenchman General Pierre Labatut, was pivotal in 
achieving victory. However, the political disputes of that decade 
placed the new emperor at odds with the regional elites. Their 
suspicion of the new imperial army (in 1828 it included a few 
thousand Irish and Germans recruited abroad) and of the Por- 
tuguese-born emperor and his Portuguese generals led to his 
abdication in 1831 and to the formation of the National Guard 
as a counterpoise to the army. 

The army barely survived the 1830s and had to contend with 
the National Guard as a potential rival until early in the next 
century. What institutionalized the army were the fierce cam- 
paigns under the leadership of Luis Alves de Lima e Silva (later 
the famous Duke of Caxias (Duque de Caxias)) that crushed 
regional revolts (see The Regency Era, 1831-40, ch. 1) in the 



338 



Two Brazilian Air Force Northrop F-5Es, capable of in-flight 
refueling, pass over Rio de Janeiro's Corcovado. 
Courtesy Brazilian Embassy, Washington 

1830s and 1840s. Army organization was improved in the cam- 
paign against Argentine president Juan Manuel de Rosas in the 
upper Rio de la Plata in 1852 and institutionalized as a result of 
the War of the Triple Alliance (1864-70) against Paraguay. 
That war provided the army's principal battle experience and 
heroes and fixed its main locus of operations on the South 
(Sul) for decades to come. 

Brazil's involvement in the Paraguayan War proved to be a 
watershed for the army and navy. Brazil joined Argentina and 
the Uruguayan Colorados (members of the Colorado Party) 
and successfully resisted the expansionism of Paraguayan dicta- 
tor Francisco Solano Lopez. In March 1870, Solano Lopez was 
defeated decisively. Although the number of Paraguayan casu- 
alties remains a topic of debate among historians, a majority of 
the Paraguayan adult male population supposedly was killed. 
The Paraguayan War rapidly expanded the size of Brazil's army. 
In 1864, prior to the war, Brazil had 17,000 soldiers in the 
army; by the end of the war, there were 100,000. 

On returning to Brazil, many of the officers were restless 
with the deficiencies in their economy, such as the lack of an 



339 



Brazil: A Country Study 

industry to supply the army adequately. Their leader, the 
Duque de Caxias, was loyal to Pedro II (emperor, 1840-89) and 
kept anti-imperialist sentiments under control, but after he 
died in 1880 officers became more active in the political arena. 
Although they were barred legally from debating government 
policies publicly, some military officers expressed dissatisfac- 
tion openly. For example, they resented their role in capturing 
runaway slaves. In 1879 officers reacted strongly to a bill that 
would reduce the size of the military. In 1883 they vehemently 
opposed compulsory payments to an insurance fund. In 1887 
they founded Rio de Janeiro's Military Club (Clube Militar) to 
express their grievances. The Military Club provided a forum 
for open debate and criticism of government policies. 

Field Marshal Manuel Deodoro da Fonseca, the first presi- 
dent of the Military Club, emerged as a vocal proponent of mil- 
itary interests. On November 9, 1889, Benjamin Constant, a 
leading advocate of positivism (see Glossary), spoke at the Mili- 
tary Club and called for "full powers to free the military from a 
state of affairs incompatible with its honor and its dignity." Less 
than a week later, on November 15, Deodoro led a bloodless 
coup, which ended the empire of Dom Pedro II, and ushered 
in the Old Republic (1889-1930). On November 16, he 
declared Brazil a federal republic. 

Deodoro was the provisional leader of Brazil until February 
25, 1891, when Congress elected him president. He served as 
president until November 23, 1891. Under Deodoro the army, 
which had decreased to 13,000 members in the aftermath of 
the Paraguayan War, increased its size to 20,000. Army officers 
governed half of Brazil's twenty states at the time. Cabinet 
members, however, were primarily civilians (exceptions 
included Colonel Constant, minister of war; and Vice Admiral 
Eduardo Wandenkolk, minister of navy) . 

Deodoro promulgated a new constitution on February 24, 
1891, and a day later was elected president by Congress under 
that charter's provisions. Indicating their displeasure with what 
they perceived to be a fraudulent and manipulated constitu- 
tion, Congress elected Deodoro's rival, Floriano Peixoto, to the 
vice presidency. On November 23, 1891, Deodoro resigned 
from the presidency because of strong resistance to his policies 
from Congress, some states, the navy, and a faction of the army 
led by Peixoto. Peixoto assumed the presidency on the same 
day, and ruled until November 15, 1894. Because of his strong 



340 



National Security 



personality, he was known as the Iron Marshal (Marechal de 
Ferro). 

Peixoto was succeeded by Prudente Jose de Morais e Barros, 
also known as Prudente de Morais, the first civilian president of 
Brazil (1894-98), and the first elected by popular vote. Pru- 
dente de Morais was succeeded by Manuel Ferraz de Campos 
Sales (president, 1898-1902). Prudente de Morais and Campos 
Sales were the first of various presidents in what has been 
termed the Republic of the Oligarchies (Republica das Oligar- 
quias), in which coffee growers in the Southeast (Sudeste) 
effectively controlled the presidency. 

As presidents, Deodoro and Peixoto provided for the transi- 
tion from empire to republic. In a matter of five years, the Bra- 
zilian presidency was turned over to a directly elected civilian. 
The governments between 1894 and 1930 were inherently con- 
servative, but this was Brazil's first experiment with democracy. 

Military Rebellion and the Revolution of 1930 

Military planners in the late 1920s characterized the army as 
the central agent of Brazilian national unity and greatness. 
They believed that economic development, military prepared- 
ness, and national power were linked tightly. The national ter- 
ritory held immeasurable resources that had to be protected 
from covetous foreigners until Brazilians could exploit them. 
They pointed to Japan and Argentina as examples of countries 
building military and economic power simultaneously. Reform- 
ist officers (called "Young Turks" after the military reformers of 
Turkey) thought that the lack of national cohesion was a far 
greater threat to Brazil than was any foreign threat. The army, 
in their view, was the only instrument to hold the country 
together by being a school of citizenship, and by teaching the 
superiority of the collective over individual good in sacrifice for 
the motherland. Meanwhile, Brazilians of all classes fled from 
military service, and draft dodging was chronic. 

Even so, obligatory military service resulted in the physical 
expansion of the army, which eventually gave it the ability to 
intervene in politics and in society more profoundly than in 
the past. To give the army a local image while eliminating the 
expense and supervisory burden of transporting draftees to 
distant training camps, garrisons were established in every state 
to train them. The new system also required expanding the 
number of personnel in the army (18,000 to 25,000 in 1916- 
17, 30,000 in 1920, 48,000 in 1930, 93,000 in 1940); indeed, 



341 



Brazil: A Country Study 

during the Old Republic, it grew 52 percent faster than did the 
rapidly growing population. 

In the 1920s, an intense struggle for control of the army was 
in part motivated by conflicting ideas of what the institution's 
role was to be in the increasingly consolidated Brazilian nation- 
state. The German-trained Young Turks sought modernization. 
After 1919 the French Military Mission also encouraged profes- 
sionalization and enhancement of the army's self-image as the 
central institution of the Brazilian state. By 1929 the state had 
intensified its centralizing powers by expanding federal owner- 
ship of the country's railroads, shipping lines, ports, and banks. 
In the coffee-dominated economy, the federal government 
controlled coffee marketing and sought to influence world cof- 
fee prices. However, some officers were troubled by who was 
running the state and army during the presidencies of Vences- 
lau Bras Pereira Gomes (1914-18), Delphim Moreira da Costa 
Ribeiro (acting, 1918-19), and Epitacio da Silva Pessoa (1919- 
22). 

The lieutenants' rebellions (tenentismo — see Glossary) of the 
1920s were complicated in that they involved a minority of 
officers who were as much in revolt against the army hierarchy 
as against the central government. There was to be no amnesty, 
and so faced with either giving up their careers or continuing 
to conspire, the tenentes chose the latter. The result was the 
1924 uprising in Sao Paulo and Rio Grande do Sul, which led 
to the retreat of the tenentes into the interior and the long cam- 
paign of the Prestes Column, named after the romantic revolu- 
tionary Luis Carlos Prestes, across Brazil until it gave up and 
entered Bolivia in 1927. In that decade, many of the best of the 
officer corps became rebels to save their careers and to save the 
army from corrupt officers. Thus, during the 1920s, the army 
institution played a conservative role, while a determined, tal- 
ented minority of its officer corps pursued revolution. 

In the revolts of 1930, the tenentes joined with disgruntled 
former officers and anti-Paulista politicians who felt that their 
regional interests were suffering unduly from the Sao Paulo- 
centered national state. For the tenentes, joining the Liberation 
Alliance (Alianca Libertadora) was a compromise of their ide- 
als because they were locking arms with the very politicians 
against whom they had rebelled — former presidents Pessoa 
and Artur da Silva Bernardes (1922-26). This course of action 
was necessary, however, if the tenentes hoped to win. The alli- 
ance also included their old civilian allies: the gaucho "libera- 



342 



Two 326 Xavante AT-26 aircraft, made by the Brazilian Aeronautics 
Company (Empresa Brasileira Aerondutica — Embraer), overfly a 

colonial fortress. 
Courtesy Brazilian Embassy, Washington 

tors," Paulista democrats, and Federal District (Distrito 
Federal) opposition politicians. 

In the past, the tenentes had always sought the support of 
higher ranking officers. In 1930 they failed to get any generals 
to join them, so they settled for an up-and-coming lieutenant 
colonel, Pedro de Goes Monteiro, who had fought against 
them. In the next decade, he would reshape the army. For its 
part, the Liberal Alliance, led by Getulio Dorneles Vargas, gov- 
ernor of Rio Grande do Sul, embraced tenente demands — such 
as the secret ballot, better election laws, treatment of social 
problems, and especially amnesty. In this way, the tenentes 
became one of the strong arms of the dissident oligarchies of 
Rio Grande do Sul, Minas Gerais, Sao Paulo, and Paraiba. 

The revolutionaries were successful in 1930 largely because 
the army lost its will to defend the regime. The command 
structure in effect imploded, and the rebels quickly gained 
control of fifteen of the twenty states. The senior generals in 
Rio de Janeiro realized that the government was finished, and 
that they would be too if they did not at least keep hold of what 



343 



Brazil: A Country Study 

remained of the army in the capital. Also, they were nervous 
that the police would lose control of the streets, so they took 
President Washington Luis Pereira de Sousa (1926-30) into 
custody. Many texts speak incorrectly of the army staging a 
coup and turning the government over to Getulio Vargas. In 
fact, the generals were looking at defeat and acted to gain some 
say in the future. 

Nonetheless, the senior ranks were thinned by a massive 
purge. By the end of 1930, nine of the eleven major generals 
and eleven of the twenty-four brigadier generals were retired, 
and in 1931 twelve of the twenty brigadier generals, many of 
whom had been promoted recently, also were retired. The rev- 
olution of 1930 opened a decade of reform that made the army 
even more an instrument of the central government and its 
civilian leaders. 

From Moderator to Director, 1930-85 

There is a debate over whether the military appropriated the 
moderating power during the Old Republic (1889-1930). 
Many historians emphasize the moderating role as early as 
1889, with the argument that the army claimed the emperor's 
moderating power, which had allowed him to intervene in and 
resolve political conflicts. Some argue that the military did not 
assume a moderating role until after 1930, primarily during the 
1937-45 period of the quasi-fascist New State (Estado Novo) of 
Getulio Vargas (president, 1930-45, 1951-54). According to 
the revisionist view, the army in 1889 did not intend to play a 
moderating role. However, after the collapse of the army in 
1930 and its subsequent rebuilding, the military accepted the 
ideology of the poder moderador. The debate is important 
because the revisionist view suggests a more grudging accep- 
tance by the military of the moderating role. 

According to political scientist Alfred C. Stepan, the military 
played a moderating role in civil-military relations during the 
coups of 1930, 1945, 1954, and 1964; during the abortive inter- 
vention of 1961; and in 1953, when the minister of war, Gen- 
eral Henrique Teixeira Lott, guaranteed President Juscelino 
Kubitschek's inauguration as the democratically elected presi- 
dent (1956-61) on January 31, 1956. The pro-Kubitschek fac- 
tion within the military was actually the largest and most 
influential. The military viewed itself as "the people in uni- 
form" (o povo fardado), inextricably a part of the political sys- 



344 



National Security 



tern. Civilians, in turn, generally accepted the military's 
moderating function as legitimate. 

In the 1930 coup, military officers of a reformist bent sup- 
ported Vargas after he declared the previous elections fraudu- 
lent and assumed the presidency. As the army reorganized 
itself, discipline was shaky. During the decade, there were six- 
teen barracks revolts and seventy-two other instances of agita- 
tion, conspiracy, and protest. Between 1931 and 1938, at least 
624 officers and 1,875 soldiers were expelled from the army. 
Thus, one of the principal reasons for General Goes Monteiro 
and General Eurico Gaspar Dutra's support of the dictatorial 
Estado Novo in November 1937 was to reestablish control and 
discipline in the army. Whereas the turmoil of the 1890s had 
ended in the "politics of the governors," that of the 1930s 
ended in the imposition of Brazil's first long-lived authoritarian 
regime (1937-45). 

Ironically, the second coup in 1945 was against Vargas. The 
military moved to intervene a third time in 1954, again to 
remove Vargas from office, an action that led to his suicide. In 
its fourth intervention, in 1955, an anti-Kubitschek faction of 
the military, defeated by the larger pro-Kubitschek military fac- 
tion led by General Lott, failed to stop Kubitschek from assum- 
ing the presidency. In the fifth intervention, in 1961, three 
military ministers were unable to block Joao Goulart (presi- 
dent, 1961-64) from succeeding Janio Quadros (president, 
January-August 1961). The sixth intervention came on March 
31, 1964, when the military overthrew left-of-center Goulart. By 
that action, the military shifted from the moderator model of 
civil-military relations to direct military government. 

The 1964 military coup was clearly different from that of the 
previous five military interventions. For the first time in the 
twentieth century, the Brazilian military assumed political 
power. As Stepan has noted, the military became the director 
and not the moderator of politics. Instead of maintaining the 
status quo, the military sought to transform the system. That 
transformation required a new professionalism (prqftssionalismo 
novo) for the military, which had no experience in long-term 
governing. The major vehicle for that new role was the War 
College (Escola Superior de Guerra — ESG). Emphasizing 
internal security and national development, the ESG is an 
advanced training program for senior officers and civilians. 

Political scientist David V. Fleischer, referring to the security 
and development ideology of the military regime from 1964 to 



345 



Brazil: A Country Study 

1985, points out the continuity in the evolution of civil-military 
relations that can be traced to the nineteenth-century positiv- 
ism of the military activists who founded the republic under 
the slogan of "Order and Progress." This continuity extends, 
Fleischer notes, through the growing economic nationalism in 
the 1930s and the Estado Novo to the Kubitschek era. In the 
latter era, autonomous development became a priority to 
ensure national security. 

From 1964 to 1985, the military dominated the presidency. 
The army imposed its candidates for president and governor, 
and a docile Congress or an electoral college approved them. 
These candidates included Humberto Castelo Branco (presi- 
dent, 1964-67), Artur da Costa e Silva (president, 1967-69), 
Emflio Garrastazu Medici (president, 1969-74), Ernesto Geisel 
(president, 1974—79), andjoao Baptista de Oliveira Figueiredo 
(president, 1979-85). Both Medici and Figueiredo were former 
intelligence chiefs. 

The military based its original plan of government on a 
moderate degree of civilian support and complete military 
unity. With time, military government exacerbated factional- 
ism within the military. That division centered on adherents to 
and dissenters from the ESG ideology. The pro-ESG members 
of the military, the so-called Sorbonnists, were politically mod- 
erate and wanted to maintain democratic forms and institu- 
tions. They aided in returning the presidency to civilian 
government. Presidents Castelo Branco and Geisel best repre- 
sented this faction. In contrast, the hard-liners within the mili- 
tary favored suspension of democratic processes and were 
more nationalistic. They argued against a high degree of for- 
eign political and economic dependence in attaining the goals 
of security and development. The hard-liners were hesitant to 
return political power to civilians. Presidents Costa e Silva and 
Medici best represented this faction within the military. 

The Internal Security Mission, 1964-85 

A central feature of military government during the 1964-85 
period was tension between external and internal defense 
roles. After World War II, an internal orientation became 
respectable as a result of the bipolar division of the world into 
Soviet and Western camps, the peacekeeping procedures of the 
Organization of American States (OAS; see Glossary), and the 
study programs of the ESG and the Army General Staff School 
(Escola de Comando de Estado-Maior do Exercito — ECEME). 



346 



A Hawker Siddeley HS-125 EU/VU-93, Brazilian Air Force, takes off 
from Rio de Janeiro's Santos Dumont Airport on Guanabara Bay. 

A Brazilian Army Aviation helicopter 
Courtesy Brazilian Embassy, Washington 

347 



Brazil: A Country Study 

In the 1950s, the ESG expanded on the doctrines of the French 
Military Mission (1919-39) and the Joint Brazil-United States 
Defense Commission (1942-77), which emphasized the need 
for officers to study elements of the society and economy that 
contributed to socioeconomic and political stability. The ESG's 
military-civilian student body studied inflation, banking 
reform, agrarian reform, voting systems, transportation, and 
education, as well as counterinsurgency. Because of the inter- 
locking of the ESG and ECEME, by the mid-1960s the ESG's 
doctrines were mirrored in the ECEME's and thus had been 
extended to the officer corps as a whole. 

As Brazil's crisis deepened in the early 1960s, the military 
perceived the country as entering an era of subversive warfare. 
Military officers had studied this type of unconventional war- 
fare in ECEME courses on internal security and irregular war- 
fare. The ECEME played a key role in convincing officers to 
support the movement of 1964. In the months prior to March 
1964, the staff and student officers distributed newsletters 
throughout the army, arguing the necessity of intervention. 
They had come to believe that internal security and rational 
economic development would occur only if various aspects of 
the economic and political structure were altered. They also 
believed that the civilian leaders were unwilling or unable to 
make the required changes. 

For a military organization, mission and identity are tightly 
intertwined. It can therefore be argued that in seeking to clar- 
ify its mission, the Brazilian military was attempting to resolve 
its identity. Military analyst Edmundo Campos Coelho saw the 
military in the post-World War II era as suffering from a severe 
identity crisis. In his view, this crisis had its origin in the identity 
crisis of the Brazilian state, which lacked a focal institution that 
everyone could accept as the "incorporation of national 
authority." 

In 1963 and early 1964, there was widespread acceptance in 
the officer corps of the need to act against the Goulart govern- 
ment. However, there was less of a consensus for maintaining 
military control once a stable government was established. 
Even though the hard-liners were able to impose authoritarian 
rule, an underlying sense of malaise followed. The military's 
organizational structure, field training, and weapon systems 
were geared for use against conventional forces or, to a lesser 
extent, guerrilla forces. Although the military was not struc- 
tured to govern the country, military institutions adapted 



348 



National Security 



themselves to their assignments after 1964 (and especially after 
1968). Nevertheless, many officers were ill at ease in their 
police-like internal security roles, and officers reacted angrily 
when names such as milicia (militia) were applied to them. 

A power struggle in late 1965 and early 1966 led to the 
defeat of the Castelo Branco faction at the hands of the hard- 
line officers clustered around Minister of Army Arthur da 
Costa e Silva. It represented a victory for those who favored 
defining the military's mission as primarily one of internal 
security. In effect, this struggle may have produced two com- 
peting ideas of military professionalism: Stepan's "new profes- 
sionalism" of internal security versus the other that sees the 
essence of the military profession as one in which troops are 
trained and equipped to fight foreign conventional forces as 
the essence of their profession. Some officers questioned the 
legitimacy of the internal security activities of their colleagues, 
even though they may have acknowledged the need for such 
activities. These officers regarded troop commands and nor- 
mal staff assignments as being more "military" than internal 
security assignments. 

The officer corps has split in a variety of ways over the years. 
After the rise of Geisel, if not before, some officers worried that 
a high level of political involvement was bad and distracted the 
corps from its main responsibility of protecting the country 
against foreign enemies. They argued in favor of a narrow defi- 
nition of the military's mission, limiting it to external defense. 
They argued further that to mount a secure external defense, 
internal support and cohesion were necessary. Officers could 
not be seen imposing an unpopular government one day and 
appealing to the population's patriotism the next. Those who 
had long argued this way were nearly jubilant in pointing to the 
disastrous results of the failed Argentine invasion of the Falk- 
land/Malvinas Islands in 1982. 

Officers whose hands were tainted during the Military 
Republic (1964-85) were fearful of reprisals once civilian gov- 
ernment returned. In August 1979, Congress approved 
Figueiredo's proposal for amnesty, for both the agents of 
repression and those who took up arms against the regime. 
The amnesty facilitated the military's return to the barracks but 
did not resolve the moral or legal issues involved. With the 
return of full democracy in 1985, the victims began seeking 
redress in the courts, while some officers with tarnished reputa- 
tions were coming up for promotion to general. Many active 



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Brazil: A Country Study 

and retired officers who were not involved directly in repres- 
sion or torture tended to defend colleagues who were. The 
cleavages that the repression caused within the military and 
between the military and society have posed major problems 
for the army. 

The hard-liners usually are very nationalistic and argue for 
stronger stances in foreign policy, for stronger controls over 
multinationals, and especially for stronger positions against the 
United States and the International Monetary Fund (IMF — see 
Glossary). On October 7, 1987, a group of retired hard-line 
generals and their civilian allies formed the Brazilian Associa- 
tion for the Defense of Democracy (Associacao Brasileira de 
Defesa da Democracia — ABDD). The ABDD argued for a new 
military intervention "if the politicians did not turn back the 
chaos." The ABDD and similar groups, although populated by 
disgruntled retirees, have virtually no political influence. 

The military has an elaborate ideology of nationalism and 
development, much of which has been incorporated into the 
thinking of civilian opinion makers and politicians. Essentially, 
this ideology holds that Brazil can be, and should be, a great 
power. The military sees its primary function as contributing to 
that objective. 

Civil-Military Relations, 1 985-94 

Alfred C. Stepan has argued that although the Brazilian mili- 
tary ceded power to Jose Sarney (1985-90) in 1985, it retained 
significant prerogatives. President Sarney depended on the 
armed forces because of his weak political base. According to 
Professor Fleischer, Sarney was not well prepared to assume the 
presidency, so General Ivan Souza Mendes, the director of the 
National Intelligence Service (Servico Nacional de Infor- 
macoes — SNI) "stepped in to fill the void" and helped him 
"organize his presidency." As a result of his dependence on the 
military, Sarney' s administration made little progress in gaining 
greater control over the armed forces. 

Congress, meeting as a Constituent Assembly (Assembleia 
Constituinte), redrafted the constitution from February 1987 
until October 5, 1988, when it was promulgated. The 1988 con- 
stitution strengthened presidential control of the military by 
removing the clause that stated the military was only obedient 
to the executive "within the limits of the law." In late 1989, the 
first direct presidential election was held in almost three 



350 



National Security 



decades, and in March 1990 Fernando Collor de Mello took 
office. 

Under President Collor de Mello, the prerogatives of the 
armed forces were reduced modestly, but erratically, in a "two 
steps forward, one step back" manner. Four examples of such 
reductions can be cited. First, Collor de Mello replaced the 
military-dominated SNI with the civilian-led Strategic Affairs 
Secretariat (Secretaria de Assuntos Estrategicos — SAE). Sec- 
ond, he cut defense spending to the lowest level in decades: 
approximately 0.3 percent of gross domestic product (GDP — 
see Glossary) in 1993, down from 0.9 percent in 1987. Third, 
he attempted to establish more effective control over Brazil's 
various nuclear and other strategic programs. And fourth, the 
government announced that the Brazilian Aeronautics Com- 
pany (Empresa Brasileira da Aeronautica — Embraer), which 
manufactures the Tucano trainer and the subsonic AMX 
fighter, would be privatized (Embraer was privatized in Decem- 
ber 1994). 

Furthermore, in 1990 Collor revealed publicly the secret 
atomic bomb project developed by the army. On September 5, 
1991, Brazil and Argentina agreed to establish the Brazilian- 
Argentine Agency for Accounting and Control of Nuclear 
Materials (Agenda Brasileiro-Argentina de Contabilidade e 
Controle de Materials Nucleares — ABACC). This agreement 
permits the International Atomic Energy Agency (IAEA) to 
inspect nuclear installations in Argentina and Brazil. On that 
occasion, Brazil also signed, with Argentina and Chile, a treaty 
forbidding the development, manufacture, and use of chemi- 
cal weapons. In December 1991, Collor participated in the 
signing of a comprehensive safeguards agreement among Bra- 
zil, Argentina, and the IAEA. 

Collor created an interministerial group to formulate a 
more restrictive arms-control policy. He increased consultation 
with the United States on the conditions for gaining access to 
the technologies covered by the MTCR (Missile Technology 
Control Regime). He also announced that Brazil would create 
a space agency, under civilian control, to open up activities in 
this sector and to promote the commercial exploitation of the 
Alcantara rocket-launching base. That agency was established 
by his successor, Itamar Franco (president, 1992-94) . 

Under Collor civilian political institutions generally were 
strengthened. The government granted the Ministry of For- 
eign Affairs (Itamaraty) even greater autonomy on foreign pol- 



351 



Brazil: A Country Study 

icy issues, including some defense-related issues. Congress 
played a more assertive role, and in late 1990 conducted a 
major investigation into Brazil's nuclear program. The investi- 
gation, conducted by a Congressional Investigating Committee 
(Comissao Parlamentar de Inquerito — CPI), was extensive and 
included the testimony of former President Joao Figueiredo 
(1979-85). 

Collor's political isolation after his first year as president led 
him to curry the support of the military. For example, Collor 
restored funding for Embraer's subsonic AMX fighter in 
mid-1991 after denying funding in 1990. In addition, the army 
announced that it would not allow a foreign firm to buy the 
nearly bankrupt Specialized Engineers, Inc. (Engenheiros 
Especializados S.A. — Engesa). Instead, Engesa, which had a 
debt of more than US$400 million and showed little hope for 
profitability, would be turned into a state-controlled enterprise. 

President Franco established closer ties with the military. He 
named various retired officers to sensitive posts within the cabi- 
net. On several occasions, he acquiesced to military requests 
for higher salaries. The government's relations with the mili- 
tary improved further after Fernando Henrique Cardoso 
became president on January 1, 1995. 

Brazil and International Conflicts, 1917-95 

Brazil's involvement in World War I did not include sending 
troops to Europe. In the early years of the war, the Brazilian 
authorities sought to maintain strict neutrality, and full diplo- 
matic relations were continued with the Central (Axis) Powers. 
Pro-Allied sentiment was strong among the Brazilians, however, 
and by 1917, when German U-boats began torpedoing Brazil- 
ian freighters, Brazil broke diplomatic relations with and 
declared war against the Central Powers. Participation in the 
war was limited largely to naval patrols in the South Atlantic. As 
a belligerent, Brazil was represented at the Versailles peace 
conference, thereby securing a measure of prestige, as well as a 
share of German reparations. This led to Brazilian member- 
ship in the League of Nations (see Glossary). 

At the outbreak of World War II, Brazil was again quick to 
announce its neutrality, and the Vargas government avoided 
any action that seemed to favor either side. The army's numeri- 
cal growth, from a 1930 level of 47,997 to a 1940 level of 
93,000, and its acquisition of modern weapons gave it the mus- 
cle to make its influence felt. Germany had become an impor- 



352 



National Security 



tant trading partner for Brazil during the 1930s and, because 
the United States was also neutral, Brazil did not feel uncom- 
fortable in that category. Shortly after the Japanese attack on 
Pearl Harbor, Brazil broke diplomatic and trade relations with 
the Axis powers and supported the anti-Axis resolution of the 
Pan-American foreign ministers meeting in Rio de Janeiro in 
1942. In the summer of 1942, a rash of U-boat sinkings of Bra- 
zilian freighters and ferries led to the abandonment of neutral- 
ity in favor of participation in the European war on the side of 
the Allies. 

The Brazilian contribution to the World War II effort was 
considerably greater than it had been during World War I. For 
example, Brazil permitted the United States to establish air and 
naval bases in the Northeast (Nordeste) and to use Natal in Rio 
Grande do Norte as a staging area for transit to Africa. Brazil 
also made the islands of Fernando de Noronha available to 
Allied forces as a base of operations for patrolling South Atlan- 
tic sealanes. In addition, Brazil placed its navy under United 
States control in order to join other Allied navies in antisubma- 
rine defense; Brazil provided corvettes and destroyers for 
Atlantic patrols and for convoy escort duty. 

Unlike other Latin American countries, Brazil dispatched 
troop units to Europe to participate in combat. The Brazilian 
Expeditionary Force (Forca Expedicionaria Brasileira — FEB) 
reached about 25,000 strong in Italy in the summer of 1944 to 
become part of the United States Fifth Army. The FEB's princi- 
pal fighting unit, an infantry division, was committed to com- 
bat that September and remained in almost continuous action 
for more than 200 days, winning high praise from Allied lead- 
ers. World War II and the military alliance with the United 
States left the military with more equipment, enhanced its 
organizational and individual skills, increased its prestige, and 
ultimately gave it what it had lacked since 1870 — combat sea- 
soning against a foreign enemy. The experience of the FEB in 
the Italian campaign also gave the army a popular status some- 
what separate from the Estado Novo and allowed the FEB veter- 
ans (Febianos) to return as heroes. After the war, an elaborate 
memorial was erected in Rio de Janeiro to honor the 451 ser- 
vicemen who lost their lives during the conflict. 

Since 1945 the armed forces have not engaged in interna- 
tional combat. However, Brazil did send units to the Suez Canal 
in 1956, to the Belgian Congo in 1960, and to the Dominican 
Republic in 1965. The first two instances were in response to 



353 



Brazil: A Country Study 

UN requests for multinational peacekeeping forces. The third 
was in answer to a call from the OAS, after President Lyndon B. 
Johnson sent the United States Marines to Santo Domingo to 
intervene in the civil war. Brazil complied by sending the larg- 
est contingent of non-United States troops (1,000), and a Bra- 
zilian general, Hugo Penasco Alvim, commanded the OAS 
forces. This was called the Inter-American Peace Force (Forca 
Interamericana de Paz — FIP). 

Brazil has been reluctant to get involved in international 
conflicts that might require military action. In the early 1950s, 
Brazil politely declined the United States invitation to send 
troops to the Korean War. In September and October 1990, 
Brazil, anxious to win the release of 200 Brazilians being held 
in Iraq, refused to assist in the military blockade of Iraq, after 
Iraq invaded Kuwait. In stark contrast, Argentina sent two sur- 
face ships to the Persian Gulf. Brazil did, however, comply with 
UN Security Council Resolution 661 and cut off all exports to 
Iraq and Kuwait. The Central Bank of Brazil (Banco Central do 
Brasil — Bacen; see Glossary) suspended financial transfers to 
Iraq and Kuwait, and Brazil also observed the UN embargo of 
September 25, 1990, on air cargo. 

In the early 1990s, Brazil became increasingly involved in 
UN peacekeeping operations. In 1993-94, for example, Brazil 
sent a company from the 26th Airborne to Mozambique for six 
months. By May 1994, 152 members of the Brazilian military 
and police were involved in five of the fourteen UN efforts — 
Angola, El Salvador, Mozambique, the former Yugoslavia, and 
on the Rwanda-Uganda border. These included eleven troops, 
sixty-six police, and seventy-five observers. A Brazilian brigadier 
general commanded the UN officer observer group in 1994- 
95. The officers were involved in nonmilitary assignments, in 
areas such as medical support, management, and observation. 
Typically, a Brazilian officer was assigned to one of the opera- 
tions for one year, before being replaced by a fellow officer. 
Brazil's Congress had to approve any contributions to the 
peacekeeping forces. In 1995 Brazil sought to send a battalion 
to join the UN peacekeeping force in Angola. Although the 
ministries of planning and finance forced a delay because of 
budget constraints, a Brazilian battalion went to Angola. 

Foreign Military Influence 

The armed forces have been influenced by both European 
and United States doctrines. The French influence was stron- 



354 



Two Dassault-Breguet Mirage F-l 03s, Brazilian Air Force 
A Bell 205 Iroquois UH-1H helicopter, Brazilian Air Force 
Courtesy Brazilian Embassy, Washington 



355 



Brazil: A Country Study 

gest at the end of the nineteenth century, up to World War I. 
Brazil's navy was more heavily influenced by the British in the 
nineteenth century and by the Americans from World War I 
onward. Brazilian officers served on United States Navy vessels 
in World War I. In the early twentieth century, German influ- 
ence grew in Brazil and in most of South America. From 1900 
to 1914, many junior officers spent two-year assignments in 
Germany. During the interwar period, French influence again 
predominated, given Germany's defeat in World War I. With 
the reemergence of Germany in the mid-1 930s, German influ- 
ence challenged that of France. 

United States-Brazilian security relations can be understood 
best in the context of the broader bilateral relationship. That 
relationship can be characterized as one of asymmetrical inter- 
dependence, in which Brazil depends more on the United 
States (especially its markets) than vice versa. Since the mid- 
1960s, Brazil has emerged as the dominant actor in South 
America, despite pressing political, economic, and social prob- 
lems. As a result, Brazil has narrowed the asymmetries in its 
relationship with the United States and is more autonomous. 

One implication of this change is that the United States has 
less influence in its relationship with Brazil. Another is that 
there cannot be a return to the status quo ante, when Brazil 
was perceived as a "junior partner. " Brazil is a qualitatively dif- 
ferent country than it was a generation ago. It has the world's 
ninth largest economy, a population of more than 160 million 
people, and a broad industrial base. Although the United 
States is still the dominant actor in the relationship, Brasilia 
now has greater leverage in its dealings with Washington. 

As a parallel to the changing bilateral relationship, the 
tenor of United States-Brazilian security relations has shifted 
over time. During World War II, Brazil supported the Allies, 
and Brazilian troops fought alongside their United States coun- 
terparts in the Italian campaign beginning in 1942. In the post- 
war era, United States security ties with Brazil were close, if 
somewhat paternalistic. Brazil and the United States signed a 
Military Assistance Agreement in 1952, through which the 
United States provided most of Brazil's major weapons and 
much of its military training. Relations between the two coun- 
tries began to deteriorate in the late 1960s and early 1970s, as a 
result of Washington's restrictions on the transfer of arms to 
Latin America and Brazil's growing assertiveness in its foreign 
policy. 



356 



National Security 



In April 1977, Brazil abrogated unilaterally the 1952 United 
States-Brazilian Military Assistance Agreement in reaction to 
pressure on Brazil by President Jimmy Garter's administration 
to improve its human rights record and to rescind its 1975 
nuclear accord with West Germany. The abrogation curtailed 
the regular flow of United States arms to Brazil and reduced 
channels of interaction between United States and Brazilian 
officers, especially in the area of training. The termination of 
the agreement manifested a more aggressive and nationalistic 
foreign policy under President Ernesto Geisel. Moreover, this 
was reflected in Brazil's industrial prowess, its capabilities as an 
arms producer, and its diversified external ties. 

In the 1980s, the United States and Brazil sought to improve 
security ties by developing structures and processes that 
reflected changes in both countries and in their overall rela- 
tionship. The major change in Brazil was the continued politi- 
cal liberalization under President Joao Figueiredo (1979-85), 
with the eventual return of civilian government in March 1985. 
In the United States, the administration of President Ronald 
Reagan distanced itself from the Carter administration's 
human rights policies and took a more pragmatic approach, 
stressing good relations with Brazil's military. On August 31, 
1983, the United States and Brazil signed a memorandum of 
understanding on industrial-military cooperation, and fre- 
quent meetings were held between high-level officials of both 
countries. Despite these and more recent efforts, security rela- 
tions between the United States and Brazil have remained cool. 
A variety of tensions remain, encompassing broad spheres of 
the bilateral relationship, including technology transfers, and 
specifically nuclear proliferation — Brazil's nuclear and space 
programs and their potential for military applications. In addi- 
tion, the United States has been concerned with Brazil's arms 
transfer policies. Increasingly, however, and much to the 
annoyance of the Brazilians, the issue of drug trafficking has 
dominated the agenda. 

The transformation from bipolarity to multipolarity has 
pressed Brazil to further diversify its foreign relations and 
strengthen its ties with countries within Latin America and out- 
side the region, such as France, Germany, Japan, China, and 
the countries of Central and Eastern Europe. The United 
States is unlikely to be displaced as the major external actor in 
Brazil. However, it will encounter growing competition from 
the rest of the world. 



357 



Brazil: A Country Study 

The traditional sources of equipment reflect the doctrinal 
influence on the respective service. Thus, the Brazilian Navy at 
the turn of the century depended primarily on British mate- 
riel. In contrast, army equipment came primarily from France 
and Germany. After 1942 Brazil depended primarily on the 
United States for its imported arms. During the 1970s, Brazil 
became more self-sufficient, as it produced a broad array of 
military equipment. In addition, Brazil diversified its sources of 
equipment, turning increasingly to Europe. In 1994 and 1995, 
Brazilians negotiated to purchase Russian military equipment 
at "cut-rate" prices. Nonetheless, in the early 1990s, the United 
States was still the most important source of imported materiel. 
In addition, the United States has participated since 1959 in 
annual naval exercises with Brazil (UNITAS) and has been 
involved in numerous fleet exchanges. 

The Military Role in the Intelligence Services 

The National Intelligence Service, 1964-90 

The military-dominated SNI, which the Castelo Branco gov- 
ernment created in 1964, was intended originally as a civilian 
agency of the executive branch. Initially, the SNI, under retired 
General Golbery do Couto e Silva, freed Castelo from depen- 
dence on army and Federal Police intelligence reports. The 
then head of the army, General Costa e Silva, feared that the 
new agency would weaken the army's secret service. However, 
by the end of 1968, with the triumph of the hard-liners, the SNI 
took on a military coloration. In 1973 it secured its dominance 
over the so-called intelligence community with the opening of 
the National Intelligence School (Escola Nacional de Infor- 
macoes — EsNI) in Brasilia. The following year, the EsNI 
absorbed the ESG postgraduate intelligence course. Suppos- 
edly, the EsNI did not train police agents, and it selected its 
own students. By 1980 some officers were saying that the EsNI 
would be as useful as the ESG to their careers. 

Alfred Stepan observed that the SNI differed from similar 
agencies in other countries in that it enjoyed a near monopoly 
over operations and training, and that the SNI chief had minis- 
terial rank and therefore sat in the president's cabinet. In addi- 
tion, he has pointed out that the SNI had an official in every 
government agency, in state-owned businesses, and at one 
point in the universities. These officials followed the daily func- 
tioning of the administrative machinery to ensure conformity 



358 



National Security 



with national security goals. Moreover, the SNI was autono- 
mous, even regarding finances. 

The SNI served as the backbone of the military regime's sys- 
tem of control and repression. Although there have been 
secret police in Brazil since at least the Vargas era, military 
involvement reached new heights with the creation of the SNI. 
The SNI grew out of the Institute for Research and Social Stud- 
ies (Instituto de Pesquisas e Estudos Sociais — IPES), which 
General Couto e Silva had established to undermine the Gou- 
lart government. The SNI provided clearances for anyone seek- 
ing a government job or requesting to conduct research in the 
army archives. Using an elaborate system of informants and 
telephone taps, the SNI accumulated and analyzed reports on a 
wide range of people, organizations, and topics. One study by 
political scientists David V. Fleischer and the late Robert Wes- 
son suggests that there were as many as 50,000 persons in the 
employ of the SNI during the 1964-85 regime. Furthermore, 
both Presidents Medici and Figueiredo had been SNI chiefs. 

In theory, the SNI supervised and coordinated the intelli- 
gence agencies of the three services. However, in practice the 
service agencies maintained their autonomy. The service agen- 
cies included the Army Intelligence Center (Centro de Infor- 
macoes do Exercito — CIE); the Air Force Intelligence Center 
(Centro de Informacoes da Aeronautica — CIA); and the Naval 
Intelligence Center (Centro de Informacoes de Marinha — 
Cenimar). 

The chief of staff of each of the army commands supposedly 
was responsible for the intelligence work in that command's 
territory. In practice, that officer was not necessarily informed 
of CIE activities, which followed a parallel chain of command. 
Each command also had an Internal Operations Department- 
Internal Defense Operations Center (Departamento de Oper- 
acoes Internas-Centro de Operacoes de Defesa Interna — DOI- 
CODI) . The DOI-CODIs became centers of dirty tricks and tor- 
ture. 

From the outset, there was resistance to the idea of the CIE. 
In 1966 President Castelo Branco rejected the idea of creating 
an army intelligence service annexed to the minister of army's 
office, because it would weaken the General Staffs influence. 
The next year, the new minister of army, General Aurelio de 
Lyra Tavares, established the CIE over the objections of the 
chief of staff, General Orlando Geisel. As early as 1968, the CIE 
was exploding bombs in theaters, wrecking bookstores, and 



359 



Brazil: A Country Study 

kidnapping people. When the left began terrorist violence in 
late 1968, the CIE expanded to about 200 officers and became 
the axis of repression, eliminating all signs of leftist violence in 
three years. 

The SNI, CIE, and other intelligence agencies were the most 
dubious legacy that the military regime left to the New Repub- 
lic. The scars of repression and violence, including the mis- 
treatment, torture, and murder of prisoners, will mark the 
officer corps for years to come. During World War II, Brazilian 
officers serving in Italy with the FEB (Brazilian Expeditionary 
Force), the first Latin American military organization in his- 
tory to participate in combat in Europe, prided themselves on 
the correct treatment they accorded German prisoners under 
the Geneva Convention. Their successors, however, were 
taught that international law did not apply in cases of internal 
security. Thus, they used massive intimidation, kidnappings, 
beatings, secret arrests and imprisonments, psychological and 
physical torture, murder, and secret burial. In the past, rebels 
or criminals from the margins of society and working-class peo- 
ple could expect brutal treatment from the forces of law and 
order. The military regime brought that experience to the 
opposition in the middle and upper classes. The "repressive 
apparatus," as it was often referred to, cast a shadow of fear and 
drew an invisible pale through Brazilian society to dissuade the 
educated classes from crossing it. It also served to dissuade 
opposition within the military itself. 

The creation of the DOI network beginning in 1971 formed 
a parallel chain of command, one that did not necessarily end 
with the president of the republic. President Geisel, a retired 
general, struggled to have his orders fulfilled by the CIE sys- 
tem. Consequently, the CIE sought to undermine his govern- 
ment and to make Minister of Army Sylvio Couto Coelho da 
Frota the next president. The CIE also waged a pamphlet war 
against General Golbery do Couto e Silva, chief of Geisel's 
Civilian Household, who wanted to shut down the CIE. 

The Strategic Affairs Secretariat, 1990-94 

When Collor de Mello became president in 1990, he 
replaced the military-dominated SNI with the civilian-led SAE. 
One of his first acts as president was to dismiss 144 officers 
from the SNI. Under the Collor presidency, the SAE emerged 
as the most important actor in formulating Brazil's security pol- 
icies. In part, its influence was derived from its direct access to 



360 



A Grajau-class naval patrol boat, theP-44 Guajard 
A Tupi-class "Tamoio" S-31 submarine, Brazilian Navy 
Courtesy Brazilian Embassy, Washington 



361 



Brazil: A Country Study 

the president. The SAE's oversight responsibilities included 
Brazil's nuclear, space, missile, armaments, and intelligence 
programs. In an example of role expansion, however, the SAE 
drafted the 1992 Multiyear Plan, a document formulated previ- 
ously by the Ministry of the Economy's National Planning Sec- 
retariat, and continued to have a strong military presence. 
Such broad activities led some to refer to the SAE as a "super 
ministry." In addition to the SAE, there are service intelligence 
agencies. 

Despite attempts to make the SAE more open, there was vir- 
tually no congressional oversight of SAE activities. On Septem- 
ber 26, 1991, President Collor submitted a bill for 
congressional supervision of the SAE's intelligence-gathering 
activities. According to the bill, the secretary of the SAE would 
be required to submit a confidential report to Congress every 
six months. Congress criticized several provisions, including 
the exemption from congressional oversight of intelligence 
activities of the armed forces and Federal Police; a penalty of 
imprisonment for three to ten years for breaches of confidenti- 
ality by Congress; and the formation of a joint congressional 
committee to monitor the SAE, thereby bypassing the commit- 
tees that already existed within the Chamber of Deputies (such 
as the Committee on National Defense) and the Senate. 

By mid-1992 it was clear that the SAE had not been "demili- 
tarized," as suggested by Collor. Reserve and active-duty mili- 
tary officers continued to head most of the departments and 
coordinating sections. Nor did the SAE effectively oversee Bra- 
zil's intelligence apparatus. There was evidence that the intelli- 
gence branches of each service did not report to the SAE. In 
October 1992, President Itamar Franco appointed Admiral 
Mario Cesar Flores to head the SAE. Some considered this mil- 
itary appointment a setback for the "demilitarization" of the 
SAE because Flores was Collor's minister of navy and was con- 
sidered a leading proponent of Brazil's nuclear-powered sub- 
marine program. 

In 1995 President Fernando Henrique Cardoso, who 
assumed the presidency on January 1, nominated Ambassador 
Ronaldo Mota Sardenberg to head the SAE. A seasoned diplo- 
mat, Sardenberg was a former ambassador to Moscow and the 
United Nations, and was widely published on issues relating to 
Brazil's foreign and security policies. President Cardoso also 
announced the creation of the Brazilian Intelligence Agency 
(Agenda Brasileira de Inteligencia Nacional — ABIN). 



362 



National Security 



Defense Industries 

Since the early twentieth century, the armed forces have pur- 
sued the goal of weapons self-sufficiency. Their intention was 
never to develop a large arsenal but to have the technical capa- 
bility to produce the arms needed for Brazil's military. During 
World War I, the large navy was cut off from resupply of big 
gun shells and became a paper navy, thus reinforcing the drive 
for self-sufficiency. The rapid industrialization that took place 
after 1930 provided the infrastructure necessary for developing 
an arms industry. After World War II, Brazil developed a steel 
mill at Volta Redonda, in Rio de Janeiro State, and quickly 
became the largest steel producer in Latin America. In 1954 
Brazil began manufacturing its first automatic pistols. The ear- 
liest armored personnel carriers (APCs) produced by Brazil, in 
the 1960s, benefited directly from some of the technology 
developed by Brazil's dynamic automotive industry. Brazil's 
push for nationalization of the computer-related industry in 
the 1970s also began with the navy, which could not decipher 
the "black box" computerized range-finding and firing mecha- 
nisms on the British frigates they had purchased, and did not 
want to be dependent on imported maintenance. 

In the 1950s, Brazil set up the precursor to the Aerospace 
Technical Center (Centro Tecnico Aeroespacial— CTA). 
Located in Sao Jose dos Campos, the CTA became the focal 
point for the arms industry. The CTA has trained a generation 
of engineers through its technical institute, the Aeronautical 
Technology Institute (Instituto Tecnologico da Aeronautica — 
ITA). In 1986 it was estimated that 60 percent of 800 Embraer 
engineers had graduated from the ITA. 

Brazil's three largest arms firms were established in the 
1960s. Avibras Aerospace Industry (Avibras Industria Aeroespa- 
cial S.A. — Avibras) was established in 1961; Engesa, in 1963; 
and Embraer, in 1969. It was only in the subsequent period, 
from 1977 through 1988, that the three firms began to export 
arms on a large scale. In addition an estimated 350 firms were 
involved directly or indirectly in the arms production process 
in Brazil. The fourth largest Brazilian arms company was the 
War Materiel Industry (Industria de Material Belico do Brasil — 
Imbel), established on July 14, 1975, to unify the army's seven 
ordnance and ammunition factories. 

Engineers associated formerly with the CTA created Avibras 
as a private aerospace firm. In 1964 Avibras was granted the 
Sonda I rocket contract and since then has been the major firm 



363 



Brazil: A Country Study 

involved with the development of sounding rockets (Sondas II, 
III, and TV) . It also has taken a leading role in developing mis- 
siles. In the 1980s and early 1990s, Avibras worked almost 
exclusively with the manufacturing of rockets and multiple- 
launch rocket systems (MLRS), such as the Astros II, in addi- 
tion to developing antitank and antiship missiles. At its peak, 
Avibras employed 6,000 people. 

Engesa also was formed as a private firm. Initially, it was 
involved in renovating World War II-vintage tanks. Engesa built 
wheeled APCs, such as the EE-1 1 Urutu amphibious APG, the 
EE-9 Cascavel armored reconnaissance vehicle, the EE-1 7 
Sucuri tank destroyer, and the EE-3 Jararaca scout car, in addi- 
tion to a wide range of other products. Engesa 1 s APCs were all 
based on an indigenously designed suspension system. Engesa's 
weapons were exported almost exclusively to the developing 
world, especially to countries in the Middle East, Latin Amer- 
ica, and Africa. By the mid-1980s, Engesa had expanded to a 
group of twelve subsidiaries and employed more than 5,000 
people. By that time, the company had spent US$100 million 
on the development of the Osorio, a main battle tank, but was 
unable to find a buyer for it. The Osorio project came to an 
abrupt end with Operation Desert Storm against Iraq in 1991. 
In 1990 Engesa had won the evaluation process by the Saudis. 
After Desert Storm, Brazil was no match for United States com- 
petition, given the close ties that developed between Saudi Ara- 
bia and the United States during the war with Iraq. 

By the mid-1980s, Embraer had become the largest aircraft 
manufacturer in the developing world, with sales of more than 
4,000 aircraft. It has encountered great success with its Bandei- 
rante and Brasilia models, sold to the United States and other 
foreign countries. In 1988, at its height, it employed more than 
12,000 workers. The Brazilian government owned about 5 per- 
cent of the company but controlled most of the voting stock. 
The government supported Embraer with generous interest 
rates on its loans, a reinvestment of profits into research and 
development, and purchases of its aircraft. 

By 1980 Brazil had become a net exporter of arms. On the 
demand side, the rapid success resulted from a growing need 
in the developing world for armaments. On the supply side, 
Brazil's arms exports were designed for developing world mar- 
kets and were noted for their high quality, easy maintenance, 
good performance in adverse conditions, and low cost. The 
product line was broad and came to include ammunition, gre- 



364 



EMB-312 Tucano T-27 trainers, Brazilian Air Force 
Final assembly line of the EMB-312 Tucano, Sao Jose dos Campos 

Courtesy Brazilian Embassy, Washington 



365 



Brazil: A Country Study 

nades, mines, armored personnel vehicles, patrol boats, navy 
patrol planes, turboprop trainers, tanks, and subsonic jet fight- 
ers. 

In the early 1980s, Brazil emerged as one of the leading 
armaments exporters in the developing world. From 1985 to 
1989, it was the eleventh largest exporter of arms. Brazil 
exported arms to at least forty-two countries, in all regions of 
the world. By far the largest regional market was the Middle 
East, to which Brazil sold approximately 50 percent of its arms 
from 1977 through 1988. According to an estimate by the 
Stockholm International Peace Research Institute (SIPRI), 40 
percent of all Brazilian arms transfers from 1985 to 1989 went 
to Iraq. 

Brazil's arms industry nearly collapsed after 1988, as a result 
of the termination of the Iran-Iraq War (1980-88), a reduction 
in world demand for armaments, and the decline in state sup- 
port for the industry. In early 1990, the two major manufactur- 
ers, Engesa and Avibras, filed for bankruptcy. 

By late 1994, it appeared that Brazil's arms industry would 
not disappear completely. It was unlikely, however, that it would 
return to the robust form of the mid-1980s. Avibras had paid 
off a substantial portion of its debt and was seeking ways to con- 
vert much of its production to civilian products. Engesa had 
been dismembered; some of its companies were sold to private 
interests, and its ordnance-related companies were taken over 
by the state and integrated with Imbel. Embraer was privatized 
in December 1994, and despite significant financial difficulties, 
it rolled out the new jet commuter plane prototype EMB-145 
in 1995. 

Mission of the Armed Forces 

The Military Mission since 1988 

Article 142 of the 1988 federal constitution states that "The 
armed forces, which consist of the navy, the army, and the air 
force, are permanent and normal national institutions orga- 
nized on the basis of hierarchy and discipline under the 
supreme authority of the president of the republic." It adds 
that "Their purpose is to defend the fatherland, guarantee the 
constitutionally established powers and, on the initiative of any 
of said powers, law and order." Significantly, the 1988 constitu- 
tion fails to include the clause that the military only be obedi- 
ent to the executive "within the limits of the law." Thus, the 



366 



National Security 



armed forces have been placed more firmly under presidential 
control. According to Complementary Law No. 69 of July 23, 
1991, the army's mission is also to cooperate in the national 
development and in civil defense. 

According to Article 84 of the 1988 constitution, the presi- 
dent has the exclusive authority to appoint and dismiss the 
ministers of state, decree a state of emergency or state of siege, 
serve as supreme commander of the armed forces, promote 
their general officers, and appoint them to posts. The presi- 
dent may also declare war "in the event of foreign aggression 
and when authorized by the National Congress." He also pre- 
sides over the National Defense Council. 

There has been little debate in Brazil's civil society regarding 
the role of the armed forces. Jose Murilo de Carvalho, a politi- 
cal scientist, has called for such a debate, arguing that it is nec- 
essary to define the tasks of the armed forces before addressing 
issues of defense expenditures. Civilians, however, have not 
taken the initiative in defining those tasks. 

The military has been seeking a new role, primarily to justify 
even its meager budget. The armed forces have seemed 
increasingly irrelevant, given the lack of an external threat 
(Brazil is involved in a common market, joint ventures, and 
nuclear cooperation with Argentina, its former rival); the lack 
of an internal threat (no political group in Brazil is calling for 
the use of violence to overthrow the government); and the 
demise of communism. In addition to a peacekeeping role, 
some of the potential new roles for the military include 
broader participation in the Amazon, involvement in the 
counter-drug war, and civic action. In late 1994 and 1995, the 
armed forces were involved intermittently in providing public 
security in Rio de Janeiro. On May 18, 1995, Governor Mar- 
cello Alencar appointed hard-line retired General Nilton Cer- 
queira, who was elected federal deputy in 1994, as state 
secretary of public security; General Cerqueira was well known 
as commander of the Rio de Janeiro DOI-CODI in the 1970s. 

The Military in the Amazon 

The Amazon region occupies more than half of Brazil's terri- 
tory. In 1985 the army announced the Northern Corridor 
(Calha Norte) project, in an attempt to establish better control 
of Brazil's interests in the Amazon. The project has consisted of 
building a series of outposts along the Brazilian border with 
Colombia, Venezuela, Guyana, Suriname, and French Guiana. 



367 



Brazil: A Country Study 

Some of these outposts have been established. Calha Norte is 
therefore more than a military project. Its goals are to provide 
effective control of the border, improve the local infrastruc- 
ture, and promote economic development of the region. 

The army has increased the number of posts near the border 
from eight to nineteen. The posts are placed under five Special 
Frontier Battalions, with headquarters from west to east in 
Tabatinga, Rio Branco, Sao Gabriel da Cachoeira, Boa Vista, 
and Macapa. In addition, the army has been transferring bat- 
talions from the South and Southeast to the Amazon: the Sev- 
enteenth Motorized Infantry Battalion from Cruz Alta to the 
Seventeenth Jungle Infantry Battalion; the Sixty-first Motorized 
Infantry Battalion in Santo Angelo to the Sixty-first Jungle 
Infantry Battalion; and the Sixty-first Engineering and Con- 
struction Battalion at Cruzeiro do Sul to Rio Branco. The First 
Brigade in Petropolis, Rio de Janeiro State, was moved to Tefe, 
Amazonas, except for one infantry battalion. Lastly, the army 
was planning to open two new garrisons in the Rio Negro 
region, at Tunui and Asuno do Icana. 

Some Brazilian officers have warned against "foreign inter- 
vention" in the region. In July 1991, Army General Antenor de 
Santa Cruz Abreu, then chief of the Amazon Region Military 
Command (Comando Militar da Amazonia — CMA), threat- 
ened that the army would "transform the Amazon into a new 
Vietnam" if developed countries continued to "international- 
ize" the region. The vitriol subsided partially in January 1992, 
when General Santa Cruz Abreu was replaced by General Car- 
los Annibal Pacheco, who dispelled some of the concerns 
about the "internationalization" of the Amazon. 

In 1993 the Brazilian press reported on United States-Guy- 
ana military exercises near the Brazil-Guyana border. The prox- 
imity of the exercise to the Brazilian border provoked an angry 
response from many high-ranking Brazilian officers and gov- 
ernment officials. United States joint exercises were also held 
with Colombia and Suriname, to the consternation of the Bra- 
zilians. In a show of force on October 4, 1994, the armed forces 
were involved in Operation Surumu, the largest combined and 
joint maneuvers ever carried out in the Amazon. The exercises 
were held north of the city of Boa Vista in the state of Roraima, 
over an area of 34,900 square kilometers. They included the 
participation of eight countries in a war against Cratenia, an 
imaginary enemy. The exercises involved 5,000 soldiers, thirty- 
seven aircraft, four ships, and two hospital ships. The army had 



368 



National Security 



the largest contingent with 3,000 men. The air force dropped 
700 parachutists into the jungle and was involved in transport- 
ing most of the troops, many by civilian aircraft. The navy pro- 
vided logistical support, using riverine patrol boats. The joint 
nature of the maneuvers indicated that whereas the army 
would continue to take the lead in the Amazon, the other two 
services (especially the air force) also would be involved. 

However, such massive operations are specially staged affairs, 
giving an impression of military power that is not reflected in 
the day-to-day reality. The commanding general of the First 
Jungle Brigade, headquartered in Boa Vista, oversees two 
infantry battalions, whose units are spread from the Guyana 
border to that with Colombia. One battalion headquarters is 
located in Boa Vista, the other in Sao Gabriel da Cachoeira. 
The general does not have his own aircraft, and he must 
request transport from Manaus if he wishes to inspect his 
troops. Headquarters maintains contact with the units via 
radio. The first battalion maintains five Special Border Pla- 
toons (Pelotoes Especiais de Fronteira — PEFs) at Bom Fim and 
Normandia on the Guyana side, at Pacarema (also called BV-8, 
for the eighth marker on the Brazil-Venezuelan line), Suru- 
cucu, and Auaris facing Venezuela. The second battalion at Sao 
Gabriel da Cachoeira has PEFs at Maturaca (near Pico da 
Neblina) and Cucui on the Venezuela border, and three more 
looking toward Colombia at Matapi, Uaupes, and Iauarete. 

The platoons consist of about seventy soldiers, corporals, 
and sergeants, and five officers, the most senior of whom is usu- 
ally a lieutenant. Many of the soldiers are recruited locally. In 
Roraima many of the soldiers are Macuxi and Wapishana Indi- 
ans. 

In late 1993, the armed forces received presidential approval 
for the Amazon Region Surveillance System (Sistema de Vig- 
ilancia da Amazonia — Sivam). Sivam will consist of a large net- 
work of radar, communication systems, and data processing 
centers and should assist the government in air traffic control 
and its efforts to curb deforestation and drug trafficking. The 
control centers of Sivam will be in Manaus, Belem, Porto Velho, 
and Brasilia. It will take at least eight years to install the system, 
at a cost of US$1.55 billion. Sivam will include five Embraer 
EMB-120 Brasilias carrying Ericsson Radar Electronics Erieye 
airborne early warning and control system. Sivam is part of a 
larger plan called the Amazon Region Protection System 
(Sistema de Protecao da Amazonia — Sipam). The purpose of 



369 



Brazil: A Country Study 

Sipam is to provide a more sophisticated infrastructure for 
policing the Amazon. 

The Sivam case was particularly controversial in 1994 and 
1995 and involved Brasilia, Paris, and Washington. In June 
1994, two days after then United States Secretary of Commerce 
Ron Brown visited Brasilia, President Itamar Franco decided to 
award the Sivam contract to a consortium led by Raytheon 
(United States), instead of to a group led by Thomson CSF 
(France). In December 1994, when many legislators already 
had left Brasilia for the Christmas holidays, Brazil's Senate 
approved the financing of Sivam. A Brazilian senator report- 
edly received US$7 million to expedite congressional approval. 
In February 1995, the New York Times reported that the United 
States Central Intelligence Agency had discovered that Thom- 
son CSF paid bribes to Brazilian officials. French diplomats 
countered that it was the United States that bribed Brazilian 
officials, paying US$30 million to obtain the contract. France 
charged the United States with industrial espionage and 
expelled five staff members from the United States Embassy in 
Paris. 

In March 1995, Raytheon's Brazilian partner, Automation 
and Control Systems Engineering (Engenharia de Sistemas de 
Controle e Automacao — ESCA), which was hired to manage 
Sivam and to develop the system's control software, was 
removed from the project because of fraud in social security 
contributions in Brazil. In its place, the Brazilian government 
proposed a team of Ministry of Aeronautics experts. However, 
wiretapping and alleged influence-peddling created the most 
serious crisis for the Cardoso administration in its first year in 
office, and threatened the very future of the Sivam project. 

At least two dozen Brazilian government organizations deal 
with the Amazon, in addition to many nongovernmental orga- 
nizations (NGOs) from both Brazil and abroad. The vast array 
of organizations reflects the many interests in the Amazon, 
which include concerns with national security, indigenous peo- 
ples, economic development, the environment, and drug traf- 
ficking. These interests often clash. In an attempt to 
coordinate Brazil's Amazon policies, President Franco created 
the Ministry of Environment and the Legal Amazon on August 
18, 1993 (later renamed Ministry of Environment, Hydraulic 
Resources, and the Legal Amazon), and placed Rubens 
Ricupero at the helm. Ricupero, the chief negotiator of the 



370 




An Aerospatiale Super Puma CH-34 helicopter, Brazilian Air Force 

Brazilian Army River Patrol commandos 
Courtesy Brazilian Embassy, Washington 



371 



Brazil: A Country Study 

1977 Amazonian Cooperation Treaty, was brought from the 
post of ambassador in Washington. 

President Collor established the Yanomami Indigenous 
Park, encompassing 9.5 million hectares of territory adjacent 
to Venezuela. The reservation is home to 25,000 members of 
the Yanomami tribe, 10,000 of whom live on the Brazilian side 
of the reserve. The 600 gold prospectors who lived on or near 
Yanomami land and ignored the extensive reservation were 
expelled. In 1992 President Collor demarcated the territory, 
and in the following year mining revenues dropped consider- 
ably. 

The problems associated with competing interests in the 
Amazon became apparent in August 1993, when at least six- 
teen Yanomami Indians were massacred near the 
Brazil-Venezuela border. Twenty-three illegal gold prospectors 
were arrested and charged with the slayings. They were later 
acquitted, after investigations allegedly indicated that the Indi- 
ans had died in conflict with other Indians. 

The governors of Roraima, Amazonas, and Para states have 
called for the reduction in the area of the reservations. Accord- 
ing to one poll, 51 percent of Brazil's legislators agreed with 
that position. Many officers within the armed forces have also 
expressed their discontent with the size of the reservations. A 
common argument is that there are few Yanomami per square 
kilometer allotted to them. 

In early 1994, there was a broad consensus in Brazil on the 
need to expand the military presence along the border. Such a 
presence was supported by Ministers Ricupero and Flores. Bra- 
zilians have expressed concerns about sovereignty, particularly 
the encroachment by the United States and others via drug 
interdiction and environmentalism. Despite such consensus, 
however, only limited funding has been available to the Minis- 
try of Environment, Hydraulic Resources, and the Legal Ama- 
zon, and the constant clash of interests has impeded a 
coordinated policy. 

The Military Role in Counter-Drug Actions 

The escalation of the war on drugs in the Andean region has 
led narco-traffickers to change their shipment routes, and Bra- 
zil increasingly is being used as such, especially for drugs sent 
to Africa and Europe. In addition, some drug producers in 
Colombia, Peru, and Bolivia have used Brazil as a shelter from 
security forces in their countries. Brazil is a major supplier of 



372 



National Security 



precursor chemicals. In the early 1990s, Brazil created the Spe- 
cial Secretariat for Drugs (Secretaria Especial de Entorpe- 
centes — SEE) to coordinate the government's counter-drug 
actions. 

Brazil's military has been reluctant to become involved in 
the war against drugs. Officers argue that, according to the 
constitution, it is the responsibility of the Federal Police to pur- 
sue such a war. The armed forces consider their involvement to 
be potentially corrupting and are loathe to become entangled 
in a "no-win" war. Furthermore, Brazilians, like other Latin 
Americans, are sensitive to United States involvement in the 
region and fear the United States may use the antidrug role as 
a rationale for an expanded presence in Brazil. From 1990 
through 1993, the United States provided Brazil with approxi- 
mately US$1 million a year for anddrug activities. As a result of 
United States Attorney General Janet Reno's visit to attend 
President Fernando Henrique Cardoso's inauguration on Janu- 
ary 1, 1995, the antidrug agreement was renewed in April 1995, 
just before Cardoso's official visit to the United States. 

The armed forces have been willing to provide logistical and 
intelligence support to the Federal Police in the war against 
drug trafficking. They have also become increasingly involved 
in countering the spread of armaments among the drug traf- 
fickers. In 1994 there were an estimated 40,000 illegal weapons 
in Rio de Janeiro. The constitution gives the army the responsi- 
bility for supervising armaments. In addition, the army's East- 
ern Command has provided the Military Police (Policia 
Militar — PM) of Rio de Janeiro State with many weapons, 
long-range vision goggles, and bulletproof vests for countering 
the well-armed drug traffickers. In October 1993, the army pro- 
vided the police forces with 7.62-millimeter FAL assault rifles — 
the first time such rifles were used by police forces in Brazil. 
The army also trained members of the Special Operations Bat- 
talion (Batalhao de Operacoes Especiais — Bope). 

In October 1993, some police officers were implicated in the 
smuggling of arms to the traffickers, and as a result the army 
was called on to take firmer measures. All weapons seized in 
police operations were to be put under army control in mili- 
tary arsenals. In addition, special army agents were to work 
with the Civil Police, Military Police, and Federal Police forces 
to identify the traffickers' arms sources. 

Drug trafficking and domestic consumption are, by all 
accounts, on the rise. Some of the groups involved in drug traf- 



373 



Brazil: A Country Study 



ficking control entire shantytowns (favelas) and are far better 
armed than the Federal Police or State Police. In October 
1994, there were reports that up to 70 percent of the police 
force was receiving payoffs by the heavily armed drug-traffick- 
ing gangs in the favelas. Growing public demands that law and 
order be restored in Rio de Janeiro prompted the Itamar 
Franco government to order the army to launch an offensive 
against the gangs and to oversee a purge of the police force. 
The army, under the command of a general, mobilized as many 
as 70,000 soldiers for the operation in the favelas. 

The task force that identified the corruption was led by 
Antonio Carlos Biscaia, attorney general of Rio de Janeiro 
State. Corruption in Rio de Janeiro was widespread, and 
included the Civil Police, Military Police, judges, and prosecu- 
tors. In addition, the Rio de Janeiro governor, Nilo Batista, was 
induced to sign an agreement with the federal government 
allowing for federal intervention through the army, which took 
over the security command of Rio de Janeiro prior to the 1994 
gubernatorial elections. By mid-1995 the army had largely 
pulled out, but the security situation was little improved. 

Civic Action 

With the possible exception of military officers in Peru, the 
officers in Brazil have been the most involved in civic action in 
South America. To a certain extent, the civic-action role has 
been appropriated because the officers consider themselves 
responsible for the guidance and development of the nation. 
Civic action is not a new role for the armed forces. Under Var- 
gas the army, which felt responsible for helping modernize the 
country through a more elaborate infrastructure, was involved 
in development and reconstruction projects. Construction bat- 
talions built roads and railroads in the interior of the country. 
Officers were placed in high positions within state enterprises 
such as the Volta Redonda steel plant and the Brazilian Petro- 
leum Corporation (Petroleo Brasileiro S.A. — Petrobras), the 
petroleum monopoly. The air force and navy were involved in 
transport to remote areas, and in health care assistance to 
those regions. As Professor Fleischer notes, "This new mission 
reinforced the doctrine of industrial development as a basis for 
national strength and security and the positivist ideology of a 
technocratic scientific approach to national problems." 

In the early 1980s, the army was again extensively involved in 
civic-action projects, such as building roads in the Northeast 



374 



National Security 



and a railroad in Parana State. Despite the reluctance of some 
officers to embrace such a role, cutbacks in defense funding 
make civic-action programs attractive. 

Defense Expenditures 

Data on Brazil's military expenditures need to be 
approached with caution. Their accuracy is complicated by 
high rates of inflation since the late 1950s, by secrecy surround- 
ing the funding of various military-related projects, by person- 
nel costs that are sometimes hidden in other budgets, and by 
the common practice of mixing the accounts of the national 
treasury, the Central Bank, and the Bank of Brazil (Banco do 
Brasil — BB). However, even if the figures generally attributed 
to Brazilian defense expenditures understate their true value, 
there is consensus that Brazil is among the countries with the 
lowest levels of military expenditures, and that those levels 
have declined in the last three decades. For example, the rate 
of military expenditures in relation to GDP has dropped 
steadily: in the 1960s, it averaged 2 percent; in the 1970s, 1.5 
percent; in the 1980s, 1 percent; and in the early 1990s, less 
than 0.5 percent. In 1993 that rate reached a mere 0.3 percent. 
Brazil in 1993 ranked 133d out of 166 countries in military 
expenditures as a share of government expenditures. Within 
South America, only Guyana and Suriname ranked lower. 

Political scientist Paulo S. Wrobel notes that these data point 
to a correlation between the type of government (military or 
civilian) and military expenditures. That correlation is made 
even clearer if one examines military expenditures as a share 
of the federal budget: in 1970 that figure was 20 percent; in 
1993 it was only 1.3 percent (see table 28, Appendix). The 1993 
figure was the lowest since independence in 1822. The highest 
figure was in 1864 and 1865, at the early stages of the Para- 
guayan War, when defense expenditures accounted for 49.6 
percent of all government expenditures. 

Brazil's low level of military expenditures can be attributed 
to the perception that the country has few external threats and 
to Brazil's large size in relation to its neighbors. In terms of 
threats, the deepening integration process with Argentina 
since the early 1980s virtually has removed the only potential 
external threat to Brazil. 

Despite its low rate of military expenditures, in absolute 
terms Brazil is by far the largest military power in Latin Amer- 
ica. In 1993 it ranked nineteenth among 166 countries in total 



375 



Brazil: A Country Study 

military expenditures; the next highest in Latin America was 
Argentina, which ranked twenty-fourth. From 1988 through 
1993, Brazil's military expenditures totaled US$43.12 billion 
(in constant 1993 dollars; an average of US$7.19 billion per 
year). They totaled US$10.6 billion in 1996. The defense bud- 
get in 1997 totaled US$12 billion. 

The armed forces have had some minor triumphs on budget 
issues. In early 1994, the Franco administration announced 
that it would cut US$22 billion in the federal budget, dividing 
the cuts equally across ministries. The military ministers 
reacted quickly, going directly to the president to criticize the 
proposed reductions. They succeeded in lowering the pro- 
posed military cuts by at least US$300 million. 

In late 1993 and early 1994, the armed forces were more 
vocal in their criticism of the low levels of military expendi- 
tures. They pointed out, for example, that the air force work 
week began on Monday afternoon, after lunch, and ended at 
Friday noon, before lunch, in order to save on the cost of feed- 
ing the officers and troops. 

Military salaries were raised substantially in mid-1991 and in 
April 1992. According to one report, before the second raise, a 
four-star general with forty years in the service was earning 
about US$1,700 a month, and many soldiers earned only a few 
hundred dollars a month. In contrast, a congressional deputy 
earned more than US$6,000 a month. 

The armed forces have been trying to protect their priority 
projects: the army — Calha Norte and the "defense" of the Ama- 
zon; the navy — its nuclear-powered submarine; the air force — 
its AMX subsonic fighter. Each project has had special funding 
from the federal government, aside from the general military 
budget. Additional funding has sometimes been available 
through various government agencies. 

In essence, the armed forces are being squeezed in an unin- 
tended fashion by a neoliberal economic model that stresses 
cuts in government expenditures and privatizations. Not only 
has their budget been cut, but they no longer have the 
ready-made sinecure of state enterprises in which to work at 
the time of retirement. Indeed, under the military regime, 
state enterprises became bloated with retired military officers. 
A 1983 study by political scientist Walder de Goes identified 
more than 8,000 retired officers who were in positions within 
the state enterprises and federal bureaucracy. 



376 



National Security 



What the defense spending levels suggest is that the military 
is having to compete with virtually every civilian ministry and, 
in many cases, is coming up short. Moreover, even though the 
military is still the most influential player on some issues, the 
number of civilian actors involved in the decision-making pro- 
cess has increased. In many cases, the military has been dis- 
placed by civilians. The Ministry of Finance has become the 
dominant actor on budget issues. Although the armed forces 
can try to appeal directly to the president, such an approach is 
not guaranteed to succeed. Also, the armed forces must deal 
directly with a Congress responsible for approving the budget. 

Organization of the Armed Forces 

Command and Control 

The three services are separate from each other, except in 
three areas: the Armed Forces General Staff (Estado-Maior das 
Forcas Armadas — EMFA), the National Defense Council (Con- 
selho de Defesa Nacional — CDN), and the Armed Forces High 
Command (Alto Comando das Forcas Armadas — ACFA) (see 
fig. 13). The EMFA, which is involved in planning and coordi- 
nation, interprets interservice views about policy and comes 
the closest to functioning as a ministry of defense. It is headed 
by a four-star general, and the chair rotates among the services. 
The ACFA is involved with more immediate, day-to-day prob- 
lems. It is composed of the ministers of the three services, their 
chiefs of staff, and the EMFA chief. 

According to Article 91 of the constitution, the CDN is "the 
consultative body of the president of the republic in matters 
related to national sovereignty and the defense of the demo- 
cratic state." The members of the CDN are the president, the 
vice president, the president of the Chamber of Deputies, the 
president of the Senate, the minister of justice, military minis- 
ters, the minister of foreign affairs, and the minister of plan- 
ning. The CDN has authority to "express an opinion in 
instances of declaration of war and the celebration of peace" 
and to "express an opinion on the decreeing of a state of emer- 
gency, state of siege, or federal intervention." In addition, the 
CDN is authorized to "propose the criteria and conditions for 
the use of areas that are vital to the security of the national ter- 
ritory and express an opinion on their continued use, espe- 
cially in the strip along the borders, and on matters related to 
the conservation and exploitation of natural resources of any 



377 



Brazil: A Country Study 




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378 



National Security 



kind." The CDN also may "study, propose, and monitor the 
progress of initiatives necessary to guarantee national indepen- 
dence and the defense of the democratic state." 

Interestingly, the highest level consultative body available to 
the president is the Council of the Republic (Conselho da 
Republica). This body does not include any military minister 
or officer, although the president may call on a military minis- 
ter to participate if the matter is related to the respective minis- 
try's agenda. According to Article 89 of the constitution, the 
Council of the Republic has authority to make declarations of 
federal intervention, a state of emergency, and a state of siege 
(all security-related issues). 

Army 

As in most Latin American nations, the Brazilian Army has 
been the most influential of the services because of its size, 
deployment, and historical development. Not only did senior 
army generals occupy the presidency from 1964 until 1985, but 
most of the officers who held cabinet posts during that time 
were from the army. In 1997 the army totaled 200,000 mem- 
bers. 

Considering the short conscript tour (usually nine to ten 
months), the army has a high number of conscripts: 125,000. 
Because of the need for literate and skilled young men to han- 
dle modern weapons, the army has served as a training ground 
for a large reserve force. Its highly professional officer corps 
serves as a nucleus around which the trained service would be 
mobilized if required. 

The noncommissioned officer (NCO) corps is not well 
developed. NCOs have virtually no autonomy or authority. 
Emphasis on training and professional development is for 
officers only. The NCOs account for slightly more than 
one-third of the total army strength. About half of the NCOs 
are sergeants, who serve as command links between officers 
and ranks. Some also serve as middle-level technicians. 

In the early 1990s, the army began to undergo a genera- 
tional change. The generals of the early 1990s had been junior 
officers in the early 1960s and had witnessed the military coup 
in 1964. Their worldview was shaped and influenced by the 
anticommunism of that time. These generals were being 
replaced by colonels who had entered the army in the early 
1970s and whose view of the world had been shaped less by ide- 
ology and more by pragmatism. The United States, particularly 



379 



Brazil: A Country Study 

through its counterinsurgency doctrines of the early 1960s, was 
more influential with the older group of officers. 

The Army General Staff (Estado-Maior do Exercito — EME) 
directs training and operations (see fig. 14). The EME has 
expanded from four sections in 1968 to fifteen sections in 
1994. It is headed by the EME chief, except in the event of a 
war. 

From 1946 through 1985, the army was divided into four 
numbered armies: the First Army was centered in Rio de 
Janeiro, the Second Army in Sao Paulo, the Third Army in 
Porto Alegre, and the Fourth Army in Recife. Historically, the 
First Army was the most politically significant because of Rio de 
Janeiro's position as the nation's capital through the 1950s. 
The Third Army was also important because of its shared bor- 
der with Argentina (Brazil's traditional rival in Latin America) 
and Uruguay. In 1964, for example, close to two-thirds of the 
Brazilian troops were in the Third Army, and somewhat fewer 
than one-third were in the First Army. The rest were sprinkled 
throughout the Second and Fourth Armies. The Planalto Mili- 
tary Command (Comando Militar do Planalto — CMP), com- 
prising the Federal District and Goias State, and the Amazon 
Military Region Command (Comando Militar da Amazonia — 
CMA) supplemented the four armies. 

On January 1, 1986, the army was restructured from four 
numbered armies and two military commands into seven mili- 
tary commands. The major addition was the Western Military 
Command (Comando Militar do Oeste — CMO), whose terri- 
tory encompasses the states of Mato Grosso and Mato Grosso 
do Sul (previously under the Second Army territory), and 
Rondonia (previously under the CMA) . Each of the seven mili- 
tary commands has its headquarters in a major city: Eastern 
Military Command (Comando Militar do Leste — CML), Rio de 
Janeiro; Southeastern Military Command (Comando Militar 
do Sudeste — CMSE), Sao Paulo; Southern Military Command 
(Comando Militar do Sul — CMS), Porto Alegre; Northeastern 
Military Command (Comando Militar do Nordeste — CMN), 
Recife; CMO, Campo Grande; CMP, Brasilia; and CMA, 
Manaus. The CMP and CMO are led by major generals 
(three-star); the other five are headed by full generals 
(four-star). The army is divided further into eleven military 
regions. The CMSE is made up of only one state, Sao Paulo, 
and is in charge of protecting the industrial base of the coun- 
try. 



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National Security 



The changes were instituted as part of a modernization cam- 
paign to make the army better prepared for rapid mobilization. 
The reorganization reflected Brazil's geopolitical drive to 
"occupy the frontier" and the growing importance of Brasilia, 
the Amazon, and western Brazil. In 1997 there were major 
units around Brasilia, four jungle brigades, and five jungle bat- 
talions extending from Amapa to Mato Grosso do Sul. A tour 
with jungle units is a coveted assignment and is considered 
career-enhancing. 

The move to occupy the Amazon and the short-term politi- 
cal implications of the army's reorganization should not be 
overstated. The army's geographic organization and distribu- 
tion have continued to reflect a concern with internal rather 
than external defense. In what is perhaps an anachronism, the 
CML in Rio de Janeiro continues to have some of the best 
troop units and the most modern equipment (see table 29, 
Appendix) . Command of the CML is still a coveted assignment, 
and the Military Village (Vila Militar), Rio de Janeiro's garrison 
or military community, is still considered one of the most 
important centers of military influence in the entire country. 
Principal army schools are located there or nearby. The CML is 
also important in countering the trafficking of drugs and arma- 
ments. 

In a significant political development, the army established a 
formal High Command in 1964. Before that time, a clique of 
generals residing in Rio de Janeiro controlled major decisions 
of the army. Throughout the authoritarian period, tensions 
often existed between the High Command and the five gener- 
als who served as president. This tension was such that Presi- 
dent Geisel dismissed Minister of Army Sylvio Frota in 1977. 
Since the January 1986 restructuring, the High Command has 
been composed of the seven regional commanders, the chief 
of staff, and the minister of army. The High Command meets 
to discuss all issues, including those of a political nature, and is 
responsible for drawing up the list of generals from which the 
president chooses those who will be promoted to four stars. 

Navy 

The navy traces its heritage to Admiral Cochrane's merce- 
nary fleet and to the tiny Portuguese ships and crews that pro- 
tected the earliest coastal colonies from seaborne marauders. 
The navy is the most aristocratic and conservative of the ser- 
vices and draws a larger share of its officers from the upper 



381 



Brazil: A Country Study 



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382 



National Security 



middle class and upper class. Although it is involved in "brown- 
water" (riverine and coastal) operations, the navy's primary 
goal has been to become an effective "blue-water" navy, able to 
project power on the high seas. Given its "blue-water" bias, the 
navy is even less inclined to become involved in counterdrug 
operations than the army or air force. 

The total naval strength of 64,700 in 1997 included Naval 
Aviation (Aviacao Naval) with 1,300 members, the Marines 
(Corpo de Fuzileiros Navais — CFN) with 14,600 members, and 
only 2,000 conscripts. Naval operations are directed from the 
Ministry of Navy in Brasilia through the Navy General Staff 
(Estado-Maior da Armada — EMA), six naval districts (five oce- 
anic and one riverine), and two naval commands — Brasilia 
Naval Command (Comando Naval de Brasilia — GNB) and 
Manaus Naval Command (Comando Naval de Manaus — 
CNM). The 1st Naval District is located at the country's main 
naval base in Rio de Janeiro; the 2d Naval District is in Salva- 
dor; the 3d, Natal; the 4th, Belem; and the 5th, Porto Alegre. 
The 6th Riverine District has its headquarters in Ladario, near 
Corumba on the Rio Paraguai. 

Until the 1980s, the flagship of the ocean-going navy was the 
aircraft carrier Minas Gerais (the ex-British H.M.S. Vengeance), 
which has been in service since 1945. Purchased from Britain 
in 1956, the Minas Gerais was reconstructed in the Netherlands 
in 1960 and refitted extensively in Brazil in the late 1970s, and 
again in 1993. In 1994 Mario Cesar Flores, a former minister of 
navy, declared in an interview that the navy would be 
hard-pressed to defend the Minas Gerais in a conflict. Neverthe- 
less, the Minas Gerais is not likely to be replaced until the next 
century. The navy's priority reequipment plans for the 1990s 
include the receipt of new Inhauma-class corvettes, the con- 
struction of Tupi-class submarines, the refurbishing of the 
Niteroi-class frigates, the acquisition of nine new Super Lynx 
and up to six former United States Navy Sikorsky SH-3G/H 
Sea King helicopters, the construction of the conventional 
SNAC-1 submarine prototype, and the development of 
nuclear-propulsion technology. In addition, the navy con- 
tracted in late 1994 to acquire four Type 22 British Royal Navy 
frigates and three River-class minesweepers for delivery in the 
1995-97 period (see table 30, Appendix). 

After years of intense rivalry between the navy and the air 
force for the control of naval aviation, President Castelo 
Branco decreed in 1965 that only the air force would be 



383 



Brazil: A Country Study 

allowed to operate fixed-wing aircraft and that the navy would 
be responsible for helicopters. According to many critics, such 
an unusual division of labor has caused serious command and 
control problems. The complement of aircraft carried by the 
Minas Gerais includes six Grumman S-2E antisubmarine 
planes, in addition to several SH-3D Sea King helicopters and 
Aerospatiale Super Puma and HB-350 Esquilo helicopters. In 
accordance with the Castelo Branco compromise, the S-2E air- 
craft are flown by air force pilots and the helicopters by navy 
pilots. A crew of the Minas Gerais with full air complement con- 
sists of 1,300 officers and enlisted personnel. 

The navy's most ambitious program is the development of a 
nuclear-powered submarine. The program enjoys broad politi- 
cal support, including from the political left, in part because of 
the perceived technological benefits that may be derived from 
the project. As minister of navy, Flores gave the development of 
nuclear propulsion for Brazil's submarines the highest priority. 

Air Force 

Established in 1941, the FAB (Brazilian Air Force) is the 
newest of the services and gradually has gained a larger share 
of the budget. The strength of the FAB — 50,000 members in 
1997 (including 5,000 conscripts), 272 combat aircraft, and 
forty-five armed helicopters — makes it the largest air force in 
Latin America (see table 31, Appendix). The FAB's budget is 
relatively large because of its civil air budget. 

The minister of aeronautics, in addition to commanding the 
air force, controls all civil air activities: the construction and 
operation of airports through the Brazilian Airport Infrastruc- 
ture Firm (Empresa Brasileira de Infraestructura Aeropor- 
tuaria — Infraero), and air traffic control through the Civil 
Aviation Department (Departamento de Aviacao Civil — DAC). 
The line of military command extends from the minister 
through his chief of staff, who heads the Air Force General 
Staff (Estado-Maior da Aeronautica — EMAer), down to the 
commanders of the three general commands: General Air 
Command (Comando Geral do Ar), General Support Com- 
mand (Comando Geral de Apoio), and General Personnel 
Command (Comando Geral do Pessoal) and three depart- 
ments: Research and Development, Civil Aviation, and Train- 
ing. There are also seven regional air commands under the 
General Air Command that cover the entire country. Num- 
bered from one to seven, the headquarters of the regional air 



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National Security 



commands include Belem, Recife, Rio de Janeiro, Sao Paulo, 
Porto Alegre, Brasilia, and Manaus. 

Personnel and Training 
Conscription 

According to Article 143 of the 1988 constitution, military 
service is obligatory for men, but conscientious objection is 
allowed. Women and clergymen are exempt from compulsory 
military service. At age seventeen, men are required to register 
for the draft and are expected to serve when they reach age 
eighteen. About 75 percent of those registering receive defer- 
ments. Generally, those from the upper class and upper middle 
class find ways to defer, and as a result the ranks are made up 
primarily of lower-class and lower-middle-class recruits. A grow- 
ing number of recruits are volunteers, accounting for about 
one-third of the total. Those who serve generally spend one 
year of regular enlistment at an army garrison near their home. 
Some are allowed six-month service terms but are expected to 
complete high school at the same time. These are called "Tiros 
de Guerra," or "shooting schools," which are for high school 
boys in medium-sized interior towns, run by army sergeants. 
The army is the only service with a large number of conscripts; 
the navy and air force have very few. 

The conscript system is primarily a means of providing basic 
military training to a sizable group of young men who then 
return to civilian life and are retained on the reserve rolls until 
age forty-five. The army recognizes that it provides a public ser- 
vice by teaching large numbers of conscripts basic skills that 
can be valuable to the overall economy when the young men 
return to civilian life. 

Ranks, Uniforms, and Insignia 

The three armed forces use several different uniforms, 
including full dress, dress, service, and fatigue. The army ser- 
vice uniform is green; the navy, navy blue; and the air force, a 
lighter blue. The senior commissioned rank (four stars) in the 
army is general {general de exercito); in the navy, admiral 
(almirante de esquadra); and in the air force, general (tenente-bri- 
gadeiro) (see fig. 15). In time of war, or in exceptional circum- 
stances, a fifth star may be worn by the highest-ranking officer 
in the army (marechal, or general of the army) navy (almirante, 
or fleet admiral), and air force (marechal do ar, or general of the 



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Brazil: A Country Study 




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National Security 



air force). Army and air force officers wear rank insignia on 
shoulder boards; navy officers wear them on sleeve cuffs. Each 
service has ten officer grades, excluding officer candidates. 

Army officer grades from second lieutenant to colonel 
equate directly with counterparts in the United States Army, 
but thereafter the systems diverge. A Brazilian brigadier gen- 
eral (general de brigada) wears two stars, and the next higher 
rank, known as major general (general de divisao), wears three; 
their United States counterparts have only one and two stars, 
respectively. The next higher rank, designated by four stars, is 
general (general de exercito). The marshall wears five stars, but 
that rank is rarely attained on active duty. There is no rank that 
corresponds to United States lieutenant general. 

Brazil's army has strict up-or-out retirement rules, which 
were developed in the mid-1960s by President Castelo Branco. 
The internal command structure determines all promotions 
through the rank of colonel. The president is involved in the 
promotions to general and chooses one candidate from a list of 
three names presented to him by the High Command. Once 
passed over, the colonel must retire. All colonels must retire at 
age fifty-nine; and all four-star generals must retire at age sixty- 
six, or after twelve years as general. 

Despite the up-or-out system, under President Sarney the 
army became top-heavy as generals began to occupy many posi- 
tions that previously had been reserved for colonels. In 1991 
there were fifteen four-star, forty three-star, and 110 two-star 
generals. The figure for four-star generals did not include four 
who were ministers in the Superior Military Court (Superior 
Tribunal Militar — STM). Thus, in the mid-1990s the army 
sought to reduce the number of active-duty generals. 

Air force ranks have the same designations as those of the 
army through colonel, and there is also no rank corresponding 
to lieutenant general. Air force general officer ranks are briga- 
dier, major brigadier, lieutenant brigadier, and air marshal; the 
five-star rank is seen rarely. Navy ranks correspond directly to 
the United States Navy counterparts, except that there is no 
one-star rank, equivalent to rear admiral (lower half) in the 
United States. The flag ranks are rear admiral, vice admiral, 
admiral, and fleet admiral. 

The highest army enlisted rank is subtenente, which is the 
equivalent of the United States master sergeant and sergeant 
major ranks (see fig. 16). The navy's highest enlisted rank is 
suboficial, which is the equivalent of the United States senior 



387 



Brazil: A Country Study 




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National Security 



chief petty officer and master chief petty officer. In the air 
force, the top enlisted rank is also suboficial, which is compara- 
ble with the United States senior master sergeant and chief 
master sergeant. 

Education and Training 

For the enlisted personnel in the three services, training is a 
constant in their military careers. Much of their time is devoted 
either to retraining others or to being trained themselves in 
various military institutions. Like officers, NCOs who aspire to 
higher ranks are expected to complete advanced training and 
educational courses. Technical courses given by army 
branches, for example, are open to all who qualify, and compe- 
tition is strong for the courses that are prerequisites for 
advancement. The navy and air force also have educational 
institutions to train technicians to operate modern weapons 
and equipment. These training courses also accept some for- 
eign students, mostly from Latin America. 

Officers are selected and promoted through a rigid system 
of competitive examinations, mandatory experience, and 
review. The army has been considered a vehicle for upward 
mobility. Officers were recruited traditionally from the urban 
middle class, mostly from white, Roman Catholic families. They 
were primarily from the center-south of the country. According 
to historian Frank D. McCann, data from the Agulhas Negras 
Military Academy (Academia Militar das Agulhas Negras — 
AMAN) show a trend in the army in recent decades to reach 
farther down the socioeconomic scale for officer candidates. As 
a result, by the early 1990s, few entrants were from the upper 
middle class and upper class; rather, they were from middle- 
and lower-middle-class and lower-class backgrounds. There was 
a corresponding increase in black and mulatto cadets. 

An example of the importance placed on education by the 
military is the School for Sergeants of the Services (Escola de 
Sargentos das Armas — EsSA) (see fig. 17). The EsSA acquired a 
reputation for excellence in the post-World War II period, 
when the drive for professionalization of the military was par- 
ticularly strong. Like officer-candidate schools, the EsSA is 
open to civilian applicants, as well as to lower-ranking enlisted 
personnel who aspire to become career NCOs. Although quali- 
fications for admission are high and the entrance examination 
is difficult, competition for admission has remained strong. 
The year-long course of instruction is weighted toward techni- 



389 



Brazil: A Country Study 



DEPARTMENT OF INSTRUCTION 
AND RESEARCH 



DIRECTORATE OF CULTURAL 
AFFAIRS, PHYSICAL EDUCATION, 
AND SPORTS 



SCIENCE AND TECHNOLOGY 
SECRETARIAT 



MILITARY ENGINEERING 
INSTITUTE 



ARMY EQUESTRIAN SCHOOL 
ARMY PHYSICAL EDUCATION 
SCHOOL 



DIRECTORATE OF PREPARATORY 
INSTRUCTION AND ASSISTANCE 



ARMY CADETS PREPARATORY 

SCHOOL 
MILITARY SCHOOLS 



DIRECTORATE OF FORMATION 
AND IMPROVEMENT 



MILITARY COMMANDS 



LARGE UNITS 
(ARMY DIVISIONS 
AND BRIGADES) 



OPERATIONAL UNITS 



AGULHAS NEGRAS MILITARY 

ACADEMY 
ARMY GENERAL STAFF SCHOOL 
OFFICERS TRAINING SCHOOL 
RESERVE OFFICERS TRAINING 

CENTERS 
SCHOOL FOR SERGEANTS OF THE 

SERVICES 



MILITARY REGIONS 



MILITARY ORGANIZATIONS 



RESERVE OFFICERS 
TRAINING NUCLEI 



DIRECTORATE OF SPECIALIZATION 
AND EXTENSION 



JUNGLE WARFARE 
INSTRUCTION CENTER 



ARMY ADMINISTRATION SCHOOL 
ARMY HEALTH SCHOOL 
COAST ARTILLERY AND 

ANTIAIRCRAFT SCHOOL 
COMMUNICATIONS SCHOOL 
ELECTRONIC WARFARE 

INSTRUCTION CENTER 
ORDNANCE SCHOOL 
PERSONNEL STUDIES CENTER 
SPECIALIZED INSTRUCTION 
SCHOOL 



GENERAL PENHA BRASIL 
PARACHUTIST INSTRUCTION 
CENTER 

























Technical-pedagogical cooperation 
Subordination 



Source: Based on information from "Formacao Militar: O ensino no Exercito," Revista 
doExercito Brasileiro [Rio de Janeiro], 127, No. 2, April-June 1990, 71. 



Figure 1 7. Organization of Military Instruction, 1996 



390 



National Security 



cal subjects to meet the demands of advancing technology in 
the services. One of the side effects of professionalization of 
the NCO corps came after the military takeover of the govern- 
ment, when NCOs demanded and received the rights to vote 
and to run for office. The constitution of 1967 included those 
rights for NCOs, whereas previous constitutions had granted 
them only to officers. 

Brazilians consider the educational systems developed for 
the armed forces, particularly in the army, to be better than 
most in the world. Many officers on active duty enter the system 
at the secondary level, beginning at one of the military prepa- 
ratory schools that are supervised and directed by the armed 
forces. The navy, for example, has a preparatory school in 
Angra dos Reis. These officers, therefore, begin their military 
careers at about age fourteen. Qualified graduates of these 
schools and other secondary schools are permitted to take the 
written examination that determines who will be admitted to 
the AMAN, which provides a full four-year course. The navy has 
its counterpart at the Naval School (Escola Naval — EN) in Rio 
de Janeiro; the Air Force Academy (Academia da Forca 
Aerea — AFA) is in Pirassununga, Sao Paulo. 

There has been an important change in the AMAN's recruit- 
ment policy. Now only those doing their third year of high 
school at the Campinas Cadet School may take the AMAN 
entrance examination. Those enrolled in the Brasilia Military 
School (Colegio Militar — CM) and all others must transfer to 
Campinas for their third year. Also since the 1970s, an increas- 
ingly higher percentage of cadets at the AMAN are sons of mil- 
itary officers and NCOs. 

Those who survive the competition for admission to the 
AMAN enroll as cadets to face a difficult four-year course lead- 
ing to an army commission. Since 1964 the curriculum has 
stressed the national security doctrine, but more emphasis has 
also been placed on social science courses in addition to the 
engineering and science subjects that have always been given 
priority. Midway through the course, cadets indicate the 
branch to which they desire assignment (such as infantry, artil- 
lery, armor, or engineering), and during the last two years at 
the academy they receive intensive specialized branch training. 

For the officer who aspires to high rank in the army, success- 
ful completion of each step in the educational system is essen- 
tial. For those who would be generals, finishing each academic 
step in the highest percentile is required; high standing in 



391 



Brazil: A Country Study 

graduating classes is among the most important criteria for 
promotion. After initial branch assignments, the system begins 
for company-grade officers with attendance at the Officers 
Training School (Escola de Aperfeicoamento de Oficiais — 
EsAO), which offers a one-year Advanced Course that is 
required for promotion to field grade. Routinely during their 
careers, officers maintain contact with branch schools through 
correspondence or refresher courses. The army's premier engi- 
neering school is the Military Engineering Institute (Instituto 
Militar de Engenharia — IME), which is in Rio de Janeiro, and 
offers technical courses, including accredited graduate 
courses. The IME is the army's counterpart to the air force's 
ITA (Aeronautical Technology Institute). 

The prize achievement for any army officer climbing the 
rungs of the educational system, however, is admittance to the 
Army General Staff School (Escola de Comando de Estado- 
Maior do Exercito — ECEME), which is at Praia Vermelha 
beach in Rio de Janeiro. The ECEME's stiff entrance examina- 
tion weeds out about 75 percent of the field-grade applicants, 
and without successful completion of the two-year course 
(reduced from three years in 1992), promotion to general 
officer rank is impossible. Appointment to faculty positions at 
military schools, including the ECEME, and attainment of the 
highly coveted general staff badge also require completion of 
the Command and General Staff Course. 

In the navy, an officer's education begins at the Naval Acad- 
emy (Escola Naval — EN) in Rio de Janeiro. The Naval Academy 
provides midshipmen with a four-year academic course equiva- 
lent to that given to cadets at the Military Academy. Graduation 
is followed by a year of shipboard training, and naval officers 
also attend a network of specialist schools, similar to the 
branch schools of the army. In addition naval officers attend 
courses at the Naval Research Institute (Instituto de Pesquisas 
Navales — IPqN), which focuses on naval science and technol- 
ogy and on research in advanced concepts. They also attend 
civilian institutions in Brazil and the Naval Postgraduate School 
in the United States. The Naval War College (Escola de Guerra 
Naval — EGN), the navy's highest educational institution, offers 
various programs for qualified officers, depending on rank. 
The EGN is located at Praia Vermelha. 

The education of air force officers follows two different 
paths, depending on whether a cadet will become a flying 
officer or a technical officer. The Air Force Academy is prima- 



392 



National Security 



rily a flight training school to which students are admitted after 
completing one year of training at the Air Cadets' Preparatory 
School (Escola Preparatoria de Cadetes do Ar — EPCAr) in Bar- 
bacena, Minas Gerais. Technical officers are trained at the CTA 
(Aerospace Technical Center) in Sao Jose dos Campos. Before 
attaining field grade, all officers attend the EsAO for courses in 
command, leadership, and administration. The next step is 
attendance at the Air Force Command and General Staff 
School (Escola de Comando e Estado-Maior da Aeronautica — 
ECEMAR) at Galeao Air Base, in Rio de Janeiro, but admission 
requirements and the entrance examination eliminate many 
applicants. Among its graduates are the relatively small number 
of officers who will be promoted to general officer rank. Other 
air force schools include the Air Force University (Univer- 
sidade da Forca Aerea), the Aeronautics Specialists School 
(Escola de Especialistas de Aeronautica), the Adaptation and 
Instruction Center (Centro de Instrucao e Adaptacao), and the 
ITA. 

Some Brazilian officers are sent to military schools abroad. 
Brazilian officers have attended United States basic and 
advanced service schools, and many senior officers have 
attended the command and staff schools, as well as the service 
war colleges, the national War College (Escola Superior de 
Guerra — ESG), and the Inter-American Defense College. In 
the 1960s and early 1970s, many Brazilian officers joined their 
Latin American counterparts at the School of the Americas, in 
Panama. During the period of strained relations between Brazil 
and the United States from 1977 through 1980, Brazilian stu- 
dents were rare on United States military bases, but in 1981 
they began returning to the United States for training. 

The top of the educational ladder for armed forces officers 
is the ESG in Rio de Janeiro. Students are selected from among 
colonels and generals or navy captains and admirals, as well as 
from among civilians who have attained high government sta- 
tus or prominence in varied fields, such as business and indus- 
try, education, medicine, economics, and even religion. Since 
1973 a few civilian women have also been admitted to the ESG. 

The ESG academic year is divided into segments of varying 
length, during which lectures and seminars cover national 
security doctrine as it pertains to all aspects of Brazilian life. 
Several weeks of discussions on basic doctrine are followed by a 
longer period devoted to national and international affairs as 
they affect security and development. Lecturers include senior 



393 



Brazil: A Country Study 

military officers, cabinet ministers, key government officials, 
academic specialists, and occasionally, foreign diplomats. 

The idea of establishing the ESG grew out of the close associ- 
ation of Brazilian and United States army officers during World 
War II and the experience of the FEB (Brazilian Expeditionary 
Force). After the war, several high-ranking FEB veterans, dissat- 
isfied with their own staff operations and particularly with joint 
service staffs, requested that a United States mission be sent to 
Brazil to help establish a war college. A United States mission 
arrived in 1948, helped with the founding of the ESG in 1949, 
and remained in an advisory capacity until 1960. The chief of 
the United States mission held faculty status at the ESG. 

Unlike the National War College in the United States, the 
ESG has placed greater emphasis on internal aspects of devel- 
opment and security and on civilian participation. The ESG 
philosophy, in which development and security are inseparably 
linked, influenced the military regime from 1964 to 1985. 

The influence of the ESG on its alumni has been extended 
by the Associations of War College Graduates (Associacoes dos 
Diplomados da Escola Superior de Guerra — ADESG), which 
maintains contact with graduates and keeps them informed of 
ESG policies and events. The ADESG was a powerful force in 
the military governments, always keeping the ideology of the 
school foremost in the minds of the many graduates who had 
attained positions of power. The school's philosophy was incor- 
porated into the curricula of all service schools, including the 
army's influential ECEME. 

The ADESG holds short training courses (mini-ESG courses) 
each semester and recruits ESG candidates. However, the ESG 
is not as prestigious as in the 1970s, is shunned by most civil- 
ians, and is not as important to the military career. 

Sociology of the Officer Corps 

Throughout the period since 1930, officers have been drawn 
largely from the urban middle class. Although the middle and 
upper classes have always gone to great lengths to avoid having 
their sons serve as common soldiers, the opportunity for a free 
education has also attracted young men without better alterna- 
tives to the officer corps. Because of its emphasis on education, 
merit, and performance, the officer corps offers more oppor- 
tunities for advancement than is the case in the political and 
socioeconomic spheres where family ties, friendships, connec- 
tions, and money play a larger role. 



394 



National Security 



A key factor shaping officers' attitudes has been the military 
educational system. However, changes in location, number, 
and function of the military schools, as well as changes in cur- 
ricula, teaching staffs, equipment, and living and training facil- 
ities, have made it difficult to develop lasting traditions and a 
sense of commonality among the graduates. Moreover, the 
changes have deepened generational divisions. 

Under Brazil's military education system, officers in a partic- 
ular class form a turma, which is often a lifelong association. 
The turmas that officers are in at graduation are monitored 
carefully thereafter. Since World War II, the socialization pro- 
cess has involved the deliberate reinforcement of turma ties, 
including the interlinking of turmas by the Armed Forces Gen- 
eral Staff. For some officers, the process may have begun in 
one of the twelve Military Schools (CMs) at the age of fourteen 
or fifteen. From the day they enter the AMAN, marching 
through the new cadets' gate, until they leave through the 
aspirants' (aspirantes) gate, the educational and training experi- 
ence brings them together in a world that emphasizes unity 
and performance. 

Spread over forty-two weeks each year, the AMAN curricu- 
lum blends military training with postsecondary studies. First- 
year cadets receive eight hours per week of military instruction, 
while second- and third-year cadets receive twelve and sixteen 
hours, respectively. The rest of their time is devoted to physical 
education, academic subjects, and study. In January and Febru- 
ary, fourth-year cadets are sent to units in the states of Rio de 
Janeiro, Sao Paulo, or Minas Gerais to help train recruits for 
four weeks; they return to the same units for two weeks in June 
and a week in October to gain experience with the same sol- 
diers further along in the training cycle. 

In the first year at the AMAN, cadets are housed by turma, 
and thereafter they are quartered in multi-turma groups by ser- 
vice and branch — infantry, artillery, cavalry, engineering, quar- 
termaster, communications, and war materiel. This early 
branch selection mirrors Brazilian civilian university proce- 
dure, which also forces career or professional selection at the 
outset. Considering that AMAN enrollment averages 1,400 and 
that graduating turmas tend to be between 300 and 400, it is rel- 
atively easy to know a large number of contemporary cadets. As 
the officer progresses from aspirante to colonel, the turma 
becomes an increasingly important identification. 



395 



Brazil: A Country Study 

The army's educational system reinforces the turmas and 
seeks to knit them together across generations. The army's per- 
sonnel department tries to form the new class at the EsAO 
from the same AMAN turma; the same is true for those who 
pass the competitive examinations for the ECEME. In the inter- 
vening years, they have served together in units throughout 
Brazil and have formed close bonds with commanders and sub- 
ordinates from other turmas. 

Student officers reach the ECEME in early middle age as 
majors and lieutenant colonels. They usually are married and 
have children. However, many officers in the ECEME cannot 
afford to bring their families to Rio de Janeiro for the two 
years. Except for the few who have their own quarters, the stu- 
dent officers live in apartments next to the school on Praia Ver- 
melha for the two-year course, forming tight relationships that 
embrace whole families. Thereafter, the ECEME relationship 
takes precedence, for only command school graduates move 
upward. The ECEME has the effect of producing midcareer 
male bonding, and it turns out articulate, active, and well-pre- 
pared administrators, planners, and commanders. 

Within the turma, ties are maintained informally by birthday 
and promotion telegrams and by meeting for discussions, when 
a number of members are stationed near each other. As the 
turma members progress through their careers, they tend to 
expand the group's contacts. Turmas may attach themselves to 
an upwardly mobile officer, or such an officer may seek ties 
with a turma in which he has trusted men (homens de confianQa) 
on whom he can call when he has openings in his command. 

ECEME instructors, who are often appointed for their aca- 
demic achievements and staff performance and who are 
upwardly mobile by definition, establish ties with the turmas 
they teach. Often when these instructors hold command posi- 
tions, they turn to their former students to fill subordinate 
slots. For example, Joao Figueiredo was a student of Ernesto 
Geisel at the ECEME. There is a structural link between the 
ECEME and the AMAN in that many of the field-grade officers 
assigned to the AMAN are customarily ECEME graduates, and 
by regulation the history and geography courses must be given 
by officers wearing the command school insignia. In this fash- 
ion, the officer generations get knitted together, thereby con- 
tributing to institutional unity. ECEME graduates shape and 
execute military doctrine. They are the military elite, filling 



396 



The V-33 Frontim, an Inhauma-class corvette, Brazilian Navy 
A new U-27 Brazilian Navy training ship being inaugurated 
Courtesy Brazilian Embassy, Washington 

staff positions in the national and regional commands. From 
their ranks come all the general officers. 

Officer Recruitment 

Because the only entry into the regular officer corps is the 
AMAN, its records provide an accurate picture of the officer 
corps. In the decades following World War II, cadets from mid- 
dle-class families increased, while those from upper-class and 
unskilled lower-class families declined. The total number of 
applicants also declined as a result of economic development 
diversification, which gave high school graduates more attrac- 
tive options than entering the military. Increasingly, AMAN 
cadets came from among the graduates of the army-supported 
Military Schools, which sons of military personnel attended 
tuition free. Many of these students were sons of NCOs whose 
own origins were not middle class, so a form of intra-institu- 
tional, upward mobility existed. 



397 



Brazil: A Country Study 

The trend in the 1960s to recruit from civilian sources has 
abated. The mental, health, and physical aptitude tests 
excluded large numbers of civilian school graduates: in 1977 of 
1,145 civilians attempting the tests, only thirty-four, or 3 per- 
cent, were admitted. In 1985 only 174, or 11 percent, of the 
AMAN's 1,555 cadets were graduates of civilian schools; the rest 
were from the army's Military School system, the Cadet Prepa- 
ratory School (Escola Preparatoria de Cadetes — EPC), or air 
force or navy secondary schools. In the early 1990s, AMAN 
cadets were drawn exclusively from those who had completed 
the EPC. By the mid-1990s, the AMAN's cadet population was 
about 3,000. 

In the twentieth century, the officer corps has been com- 
posed predominantly of men from the Southeast and South of 
Brazil, where military units and greater educational opportuni- 
ties have been concentrated. In 1901-02 the Northeast contrib- 
uted 38 percent of students at the army's preparatory school in 
Realengo, whereas in 1982 it provided only 13 percent to the 
preparatory school in Campinas. In the same years, the South- 
east supplied 40.4 percent and 77 percent, while the South 
gave 8.6 percent and 6.3 percent. Although Sao Paulo, accord- 
ing to Alfred Stepan and other observers, has not been noted 
for sending its young men into the officer corps, its contribu- 
tion increased from 4.3 percent of students in 1901-02 to 33.5 
percent in 1982. Regional origins of cadets at the AMAN were 
fairly consistent in the 1964-85 period. By far the largest con- 
tingent came from the state and city of Rio de Janeiro. 

Although social theorists might be pleased with indications 
that the army is serving as a vehicle for social mobility, army 
leaders are concerned. Officers have remarked on the trend 
toward lower-class recruitment in the Training Center for 
Reserve Officers (Centro de Preparacao de Oficiais da 
Reserva — CPOR) and the problems associated with such offic- 
ers. In a 1986 interview, the former minister of army, General 
Leonidas Pires Goncalves, observed that he did not want offic- 
ers who would give only five or ten years to the army; he wanted 
individuals with a military vocation, who would stay for a full 
thirty-plus-year career. Many officers have expressed concern 
that those seeking to use the army to improve their status are 
not sufficiently dedicated to the institution. Indeed, some offic- 
ers seek the earliest possible retirement in order to get a sec- 
ond job (second salary) to make ends meet. 



398 



A female officer serving in the 
Brazilian Army 
Courtesy Brazilian Embassy, 
Washington 




Women in the Armed Forces 

Women did not participate in Brazil's armed forces until the 
early 1980s. The Brazilian Army became the first army in South 
America to accept women into the permanent and career 
ranks. In 1992, for example, 2,700 women out of 5,000 candi- 
dates competed for 136 positions within the Officer's Comple- 
mentary Corps (Quadro Complementar de Oficiais — QCO). 

To begin a career with the army, women must have com- 
pleted a bachelor's degree in areas such as law, computer sci- 
ence, economics, or accounting. The competition is national in 
scope, and no applicant may be more than thirty-six years of 
age. Those accepted into the program study at the army's 
School of Administration in Salvador, beginning as second lieu- 
tenants (reserve). The School of Administration is also open to 
men. At the end of the one-year course, the graduate is pro- 
moted to first lieutenant in the permanent ranks. Generally, 
the officer is assigned to Brasilia. 

The navy and air force have incorporated women in their 
ranks, but in the Women's Reserve Corps. Although their posi- 
tions are temporary in nature, with regular renewal of con- 
tracts these women can rise to officer status. The navy and air 



399 



Brazil: A Country Study 

force had about 3,200 female troops and officers in 1991. In 
1992 the navy promoted its first women to the rank of lieuten- 
ant commander. The three services are committed to admit- 
ting women in their military academies by the late 1990s. The 
FAB began accepting women at its academy in 1996, but not as 
pilots. 

In 1991, 25,000 women were serving in state Military Police 
(Policia Militar — PM) units. The largest number (2,500) were 
in the Military Command of the Southeast, in Sao Paulo. The 
women generally serve in health and administrative positions, 
and at all levels of the hierarchy. 

Security Forces 

Article 144 of the 1988 constitution states that the public 
safety function is to be exercised through the following agen- 
cies: on a national level, the Federal Police (Policia Federal — 
PF), the Federal Highway Police, and the Federal Railroad 
Police; and on a state level, the Civil Police (Policia Civil — PC), 
the Military Police, and military fire departments. In practice 
the Federal Railroad Police are nonexistent, and federal high- 
ways are under Federal Police control. State highways and traf- 
fic police are under state Military Police control. The Federal 
Police force is very small and plays only a minor role in main- 
taining internal security. Police forces in Brazil are controlled 
largely by the states. Of the two principal state police forces, 
the Civil Police have an investigative role, and the uniformed 
Military Police are responsible for maintaining public order. 

Federal Police 

The purpose of the Federal Police is to investigate criminal 
offenses of an interstate or international nature; to prevent and 
suppress illicit traffic in narcotics and related drugs; to per- 
form the functions of a coast guard (enforcement only), air 
police, and border patrol; and to perform the functions of the 
judicial police. The Federal Police force is structured as a 
career service. 

Officially, the Federal Police force is known as the Depart- 
ment of Federal Police (Departamento de Policia Federal — 
DPF) and is headquartered in Brasilia. In addition to the Fede- 
ral District, DPF units are distributed throughout the states and 
territories. The DPF headquarters provides technical services 
relating to data processing, collection and dissemination of 



400 



National Security 



police intelligence, and scientific assistance to the Military 
Police. The DPF headquarters is also responsible for Brazil's 
input to and cooperation with the Paris-based International 
Criminal Police Organization (Interpol). Among the many 
agencies subordinate to the DPF are the National Police Acad- 
emy, the National Institute of Criminology, and the National 
Institute of Identification, all in Brasilia. 

The DPF is headed by a general director, who is appointed 
by the president. Under the military regime, the general direc- 
tor was usually an active-duty army general. Since the return to 
civilian rule, the general director usually has been a civilian. 
On July 8, 1993, President Franco appointed a retired army 
officer to be general director of the DPF. Many within the DPF 
were outraged and started an unsuccessful six-day strike. They 
requested the removal of the appointee, in addition to better 
equipment and better salaries. Fifteen of twenty-four regional 
superintendents and 270 police chiefs resigned in protest. The 
strike ended when Franco promised to look into various com- 
plaints. The appointee, however, kept his position. 

Indeed, the DPF force was experiencing deteriorating work- 
ing conditions in the early 1990s. In 1992 it had a major budget 
deficit. The entire 1993 budget was spent by June of that year, 
and the force was threatened with eviction from all thirty-one 
buildings that it rented. The DPF office complained that the 
drug traffickers were better equipped than they were. 

State Police 

The State Police forces, nominally under the supervision of 
the state governors, are in fact associated closely with federal 
authorities. The State Police, by definition, are powerful forces 
in their states because municipal police generally do not exist 
(although municipal guard forces are allowed, according to 
Article 144 of the constitution). The city of Sao Paulo is a nota- 
ble exception. Its mayor, Janio Quadros (elected in 1985), cre- 
ated a municipal police force. All police functions not 
performed by DPF personnel are responsibilities of the state 
forces. State Police consist generally of two separate forces: the 
Civil Police and the Military Police, sometimes referred to as 
the State Militia (Policia Militar do Estado) . The Secretariat for 
Public Security (Secretaria de Seguranca Publica — SSP), an 
important agency of each state government, supervises police 
activities. The SSPs are subordinate to the National Council of 



401 



Brazil: A Country Study 

Public Security (Conselho Nacional de Seguranca Publica — 
Conasp). 

Each state also maintains a Civil Police force, which, accord- 
ing to Article 144 of the constitution, is responsible for "the 
duties of a judicial police force and for investigating criminal 
offenses, except military criminal offenses." Given that there 
are virtually no municipal police, the state forces are stationed 
in populated areas and are responsible for all police functions. 
Cities are divided into precincts through which the Civil Police 
operate, using methods familiar to police squads in most other 
countries. Police chiefs are known as delegates (delegados), and 
the force is usually commanded by the general delegate (dele- 
gado general), whose rank is equal to that of the commandant of 
the Military Police. A delegado must have a law degree, and is 
selected by public examination. Lower-ranking officers are 
known as investigators. Promotion to the higher ranks of the 
Civil Police usually requires a law degree. 

In 1997 there were 385,600 members of state Military Police 
organizations in Brazil. They are ultimately under army control 
and considered an army reserve. A Military Police Women's 
Company was established in Rio de Janeiro in 1982. According 
to Article 144 of the constitution, the function of the Military 
Police "is to serve as a conspicuous police force and to preserve 
public order." The Military Police of any state are organized as 
a military force and have a military-based rank structure. Train- 
ing is weighted more heavily toward police matters, but coun- 
terinsurgency training is also included. Arms and equipment of 
state forces include machine guns and armored cars, in addi- 
tion to other items generally associated with police. 

Article 144 of the constitution stipulates that: "The Military 
Police forces and the military fire departments, and the auxil- 
iary forces and the Army Reserve are subordinate, along with 
the civilian police forces, to the governors of the states, the 
Federal District, and the territories." Since 1969 the Ministry of 
Army has controlled the Military Police during periods of 
declared national emergency. Before 1930 these forces were 
under individual state control, and known as "the governors' 
armies." They sometimes outnumbered regular troops in many 
states. In the 1930s, the Federal Army took steps to reverse this 
situation. In 1964 most Military Police members were on the 
side of the successful conspirators. 

The Military Police are auxiliary army forces that can be 
mobilized quickly to augment the armed forces in an emer- 



402 



National Security 



gency. In the past, Military Police units were often commanded 
by active-duty army officers, but that has occurred less fre- 
quently as professional police officers have achieved higher 
ranks and positions. The commandant of a state's Military 
Police is usually a colonel. The command is divided into police 
regions, which deploy police battalions and companies. Fire- 
fighting is also a Military Police function; firefighters are orga- 
nized in separate battalions. State traffic police are either the 
State Highway Police (Policia Rodoviaria Estadual), or the Traf- 
fic Police (Policia de Trafego) in the larger cities. Both are part 
of the state Military Police. 

Elements within the Military Police in some states have been 
notorious for their vigilantism and death-squad activities, many 
against minors. On July 19, 1993, sixteen Military Police mem- 
bers were arrested in the state of Alagoas and accused of killing 
sixty-nine people. On July 23, 1993, eight street children were 
killed outside of Candelaria Church (Igreja da Candelaria), in 
Rio de Janeiro. The international response was one of outrage. 
Four military policemen, including a lieutenant, were arrested 
and eventually convicted. On August 30, 1993, thirty armed 
men wearing hoods entered Vigario Geral, a favela in Rio de 
Janeiro, and set fires, destroyed homes, and shot randomly, kill- 
ing twenty-one people. Favela residents claimed that the assas- 
sins were Military Police avenging the killing of four of their 
members by drug traffickers in the shantytown. Later investiga- 
tions substantiated those charges. Because of such activities, 
the Federal Police have been called in to investigate. 

Various studies conducted in Brazil and abroad have linked 
the Military Police to the death squads. Social scientist Paulo 
Sergio Pinheiro, of the University of Sao Paulo's Center for 
Studies of Violence (Nucleo de Estudos de Violencia — NEV), 
stated in 1993 that "Brazil's Military Police are among the most 
violent police forces in the Third World." According to one 
explanation, vigilantism is an expression of frustration with a 
legal system that is perceived to be inefficient and corrupt, a 
court system that is backlogged, and jails that are overcrowded. 
Indeed there is significant popular support for death-squad 
activity. 

Crime and Punishment 

Crime 

There are few reliable statistics on the incidence of crime in 



403 



Brazil: A Country Study 

Brazil. The United States Department of State, in its Country 
Reports on Human Rights Practices for 1995, concluded that "A 
high crime rate, a failure to apprehend most criminals, and an 
inept criminal justice system all contribute to public acquies- 
cence in police brutality and killings of criminal suspects. Acts 
of intimidation, including death threats against witnesses, pros- 
ecutors, judges, and human rights monitors, often hindered 
investigation into these incidents." Intimidation seems to be 
most prevalent in the rural areas of the North and Northeast, 
where large landowners often threaten police, judges, lawyers, 
and reporters. 

The skewed distribution of income in Brazil (one of the 
most unequal in the world) may be partially responsible for an 
endemic and increasing problem of nonpolitical crime. Since 
returning to civilian government, Brazil has experienced a dra- 
matic increase in the level of crime. In 1992 Brazil's homicide 
rate of 37.5 per 100,000 residents surpassed that of the United 
States, with 22.76 per 100,000. Rio de Janeiro registered 4,253 
murders in 1993, up from 3,545 in 1992. Rio de Janeiro had 
seventy-two murders per 100,000 residents in 1993, compared 
with thirty per 100,000 in New York City. Meanwhile, Rio de 
Janeiro State spending on security dropped from 15 percent of 
the state budget in 1984 to 8 percent in 1994. 

As discussed earlier in this chapter, the rapid increase in the 
level of drug trafficking in Brazil raises numerous security 
issues. One has to do with the very control of national territory, 
as drug traffickers operate in the vast expanses of the Amazon 
and other regions. Indeed the threat of drug trafficking was 
used to justify the costly Sivam (Amazon Region Surveillance 
System) project. A second issue has to do with state control of 
entire favelas in Rio de Janeiro and possibly in other cities, 
where drug traffickers have a virtual monopoly over force. A 
third issue is that of potential corruption of the security forces, 
at all levels. 

The shortcomings of the judicial system lead the public to 
tolerate vigilantism, in the form of lynching of suspected crimi- 
nals. In Bahia State, for example, eighty-four documented 
cases of lynching occurred in 1993. In at least one case, the 
lynching occurred while the police watched. 

Penal Code 

The Penal Code has been amended considerably since its 
adoption in 1940 as a replacement for an older code. The 



404 



National Security 



Penal Code has two sections. The first distinguishes between 
felonies and misdemeanors and outlines the individual citi- 
zen's responsibilities under the law. The 1988 constitution pro- 
scribes capital punishment, except in case of war. The second 
section defines criminal behavior more comprehensively, spell- 
ing out crimes against persons, property, custom, public wel- 
fare, and public trust. Misdemeanors are also defined. 

In addition to the power arising from judicial warrant, 
decree laws empower the police to make arrests. These decree 
laws provide that any member of the public may, and the police 
must, arrest anyone found in flagrante delicto. The privilege of 
not being subject to arrest unless caught in the act of commit- 
ing a crime or by judicial warrant derives from the 1891 consti- 
tution and has been included in subsequent versions. Article 5 
of the 1988 constitution states: "No one shall be arrested 
except in the act of committing a crime or by written and sub- 
stantiated order of a proper judicial authority." It states further 
that an arrest must be communicated immediately to a judge 
who, if he or she finds the arrest to be illegal, must order the 
release of the arrestee. In practice, there have been many viola- 
tions of the constitutional guarantees, particularly in the late 
1960s and early 1970s. 

The process of bringing violators or suspected violators of 
the law to justice usually begins in one of three ways. The first 
and most simple occurs in cases of flagrante delicto. The sec- 
ond method is followed when illegal activity is uncovered dur- 
ing routine investigative work, after which a judge issues a 
warrant for the persons involved and arrests are made. The 
third method involves complaints from private citizens that, if 
borne out by evidence or otherwise deemed reasonable, result 
in the issuance of a warrant. 

The handling of arrestees varies according to the nature of 
the crime, the nature of the charges, and the social status of 
the accused. An arrestee who holds a university degree cannot 
be held in a cell with those of a lower educational status, but 
has the right to a special cell and privileged treatment. Felonies 
that are punishable by imprisonment and for which the 
arrestee must be detained require thorough investigation fol- 
lowed by trial in an appropriate court. Offenses punishable by 
ordinary confinement of thirty days or less, or by small fines, 
usually are disposed of quickly at the lowest court level possi- 
ble. A judge may direct that a prisoner be held in custody pend- 
ing a preliminary hearing, or the judge may allow bail 



405 



Brazil: A Country Study 



depending on the severity of the case. Prisoners may also be 
released on writs of habeas corpus. 

According to law, within twenty-four hours of arrest, a pris- 
oner must be given a copy of the complaint, signed by an 
authority and containing not only the details of the charge or 
charges but also the names of accusers and witnesses. To com- 
ply with these provisions, the police immediately must initiate 
an investigation; they must visit the scene of the incident, col- 
lect available evidence, interrogate witnesses, and compile a 
coherent account of what actually occurred. This information 
is presented as a police report to a judge, who then sets a date 
for a hearing. 

The first step in the legal process is a hearing, popularly 
known as an instruction session, to identify the parties involved 
and to determine whether a punishable offense occurred. 
Except for misdemeanors, the instruction session is not a trial 
but rather a hearing at which both the prosecution and the 
defense are heard in presentation, rebuttal, and final argu- 
ment. If the offense is a misdemeanor, the judge is permitted 
to turn the proceeding into a summary court and pronounce 
sentence. If the case involves a felony, no judgment is possible 
at the instruction session. If the judge believes that there is evi- 
dence of probable guilt, the accused is indicted and a trial date 
is set. 

There are constant tensions between the Civil Police and the 
Military Police in most states, and sometimes these forces get 
involved in shootouts. The Military Police are under the juris- 
diction of special police courts, which are independent of ordi- 
nary courts. The courts consist of five judges — one civilian and 
four ranking Military Police officials. Congressional legislation 
that would place the Military Police under ordinary courts 
remained stalled in 1995. 

According to Country Reports on Human Rights Practices for 
1994, "The Military Police courts . . . are overloaded, seldom 
conduct rigorous investigations of fellow officers, and rarely 
convict them. The separate system of state Military Police 
courts creates a climate of impunity for police elements 
involved in extrajudicial killings or abuse of prisoners, which is 
the single largest obstacle to altering police behavior to elimi- 
nate such abuses." Punishment remains the exception rather 
than the rule. 

Various studies have supported the United States Depart- 
ment of State's conclusions. One study of police crimes against 



406 



Embraer-made 111 Bandeirante P-95 aircraft, Brazilian Air Force 
P-21 Raposo Tavares River Patrol boat, Brazilian Navy 
Courtesy Brazilian Embassy, Washington 



407 



Brazil: A Country Study 

civilians in the Northeast, between 1970 and 1991, found that 
only 8 percent of the cases resulted in convictions. A separate 
study in Sao Paulo found that only 5 percent of similar crimes 
resulted in convictions. 

In his first year as president, Fernando Henrique Cardoso 
sought to address some of the human rights violations in Brazil 
by unveiling a national human rights plan and creating a divi- 
sion within the Federal Police tasked with investigating human 
rights abuses. In April 1995, Cardoso established an inter minis- 
terial commission to address the problem of forced labor. In 
addition, Cardoso sought to compensate the families of those 
who were killed by state-sponsored agents during military rule. 
Separately the federal Chamber of Deputies created a Human 
Rights Commission within the Chamber of Deputies. 

The 1988 constitution prohibits arbitrary arrest or deten- 
tion, limiting arrests to those caught in the act of committing a 
crime and those arrested by order of a judicial authority. Tem- 
porary detention is allowed for up to five days, under excep- 
tional circumstances. Judges are permitted to extend that 
period. In practice, police sometimes detain street youths with- 
out judicial authority. 

Penal Institutions 

The two general categories of penal institutions are correc- 
tional and detention. The first category includes penitentia- 
ries, houses of custody and treatment, penal and agricultural 
colonies, and houses of correction. Of Brazil's approximately 
5,000 penal institutions, fifty-one are correctional institutions, 
including twenty-seven penitentiaries, six houses of custody 
and treatment, twelve agricultural colonies, and six houses of 
correction. The second category includes military prisons, 
houses of detention, and juvenile correctional institutions. 

The Federal Prison Department (Departamento Peniten- 
ciario Nacional — Depen) is responsible for operating the penal 
system. Depen is subordinate to the National Council of Crimi- 
nal and Prison Policy (Conselho Nacional de Politica Criminal 
e Penitenciaria — CNPCP), which is under the Ministry of Jus- 
tice. Places of detention include twelve military prisons, 1,580 
prisons, 2,803 jails, and five institutions for minors. The sepa- 
rate women's penal institutions are usually operated by nuns. 
Prisoners in penitentiaries are assigned to work units in main- 
tenance shops and in light industrial plants that produce and 
maintain the clothing and furnishings used in the institutions. 



408 



National Security 



In some minimum security agricultural colonies, inmates have 
their families live with them during their incarceration. 

Prison conditions generally range from poor to harsh, and 
include overcrowding, a lack of hygiene, poor nutrition, and 
even instances of torture. In 1995 Brazil's overcrowded prisons 
held 129,169 inmates in space designed for 59,954. That com- 
pares with 23,385 inmates in 1965, nearly a sixfold increase. 
Often there are six to eight prisoners in a cell meant for three. 
The Ministry of Justice reported that thirty-three prison rebel- 
lions occurred in 1994, while attempted or successful escapes 
averaged almost nine per day. 

Internal security in Brazil is primarily the responsibility of 
state governments. The Federal Police play only a minor role 
and are limited by their small force. The largest and most 
important State Police force is the Military Police, whose mem- 
bers are uniformed and responsible for maintaining order. 
They also serve as army reserves. The Civil Police constitute a 
much smaller force, and are responsible for investigations. 

Toward the Future 

As Brazil looks toward the future, it will have to adjust its 
national security policies to new international and domestic 
conditions. In the international arena, Brazil probably will con- 
tinue its integration with nations in the Southern Cone of 
South America (especially Argentina, Paraguay, and Uruguay) 
and the rest of the continent, creating new linkages and reduc- 
ing any perception of external threat. At the same time, there 
is increasing demand for Brazil's participation in operations 
other than war, such as peacekeeping. Although Brazil has 
resisted major involvement in such operations, the country's 
desire for greater recognition by the international community 
(for example, a seat on the Security Council of the United 
Nations) may force it to be even more fully involved. 

Democratic rule in Brazil is being consolidated. The return 
of the armed forces to the barracks did not eliminate them 
from the decision-making process, but they were forced 
increasingly to share power with civilians. Unlike their counter- 
parts in Argentina, the armed forces retained some of their 
prerogatives. And yet, as Alfred Stepan concludes: "It is clear 
that the attraction of military rule — its presumed stability, 
unity, and fixity of purpose — has been largely illusory. Even 
more importantly, the difficulties encountered by the highly 
professional army in Brazil, with its technocratic civilian allies, 



409 



Brazil: A Country Study 

illustrate that there can be no apolitical solution to the prob- 
lems of political development." 

Major issues concerning Brazil's national security include 
the revision of the constitution, the role of intelligence, protec- 
tion of the Amazon, and an increasing number of actors in the 
national security arena. There is a debate over whether a 
revised constitution should give the military responsibility for 
both external and internal defense, as was granted in the 1988 
constitution. Weak political institutions in Brazil have created a 
vacuum in which the armed forces continue to play a some- 
what influential political role. Although the military has 
resisted greater involvement in civic-action and counterdrug 
activities, it may have little choice but to increase its involve- 
ment in some of these areas. The military's dominant role in 
national security (especially in the nuclear, space development, 
and arms industries) may be eclipsed by an expanding roster of 
actors. It remains to be seen how the military will respond to its 
displacement by civilian actors in the political system. 

The neoliberal economic model introduced by Fernando 
Henrique Cardoso poses major challenges for those involved 
with national security issues in Brazil. The economic model 
imposes severe financial constraints on all state-related sectors, 
including the security forces, and calls into question the size, 
roles, and missions of the armed forces. By late 1995, the 
armed forces had managed to curb any further erosion in 
defense expenditures, suggesting that the impact of the neolib- 
eral economic model on the military would not be as severe as 
in Argentina. The economic model, with its emphasis on priva- 
tization, reduces state support for defense and other industries 
previously considered "strategic." The privatization of Embraer, 
for example, symbolized a new era of reduced state support for 
defense-related industries. 

Although the neoliberal economic model has reduced the 
means for security in Brazil, the demand for security has not 
necessarily declined. On the external front, as seen above, par- 
ticipation in peacekeeping continues to strain resources. On 
the internal front, growing criminality, increased drug traffick- 
ing, and similar problems also strain the security apparatus. In 
conclusion, the need to balance means and ends in the security 
arena, at a time of major international and domestic changes, 
will challenge Brazilian policy-makers into the twenty-first cen- 
tury. 



410 



National Security 



* * * 

The rich literature on the Brazilian military is exemplified 
by Alfred C. Stepan's classic, The Military in Politics, and his 
Rethinking Military Politics. Thomas E. Skidmore provides a 
thorough review of the military regime in The Politics of Military 
Rule in Brazil, 1964-85. See also his Politics in Brazil, 1930-64. 
Stanley E. Hilton's works include "The Brazilian Military: 
Changing Strategic Perceptions and the Question of Mission" 
in the journal Armed Forces and Society. David V. Fleischer con- 
tributes excellent sections on the Brazilian military in The Latin 
American Military Institution, edited by Robert Wesson. Wendy 
Ann Hunter provides sophisticated analysis of the Brazilian 
military since 1985 in her doctoral dissertation, "Back to the 
Barracks? The Military in Post-Authoritarian Brazil." 

Comprehensive coverage of the subject of defense in Brazil 
is contained in Adrian J. English's two books, The Armed Forces of 
Latin America and Regional Defence Profile: Latin America, both 
now somewhat dated. For a study of Brazil's defense industry 
from an economist's perspective, see Patrice Franko-Jones, The 
Brazilian Defense Industry. In the field of geostrategy, good and 
concise coverage is provided by Robert J. Branco's The United 
States and Brazil: Opening a New Dialogue, which takes a political- 
economic point of view, and by Orlando Bonturi's Brazil and the 
Vital South Atlantic, which deals mainly with Brazil's geostrategic 
importance. 

From an historian's perspective, an overview of Brazilian mil- 
itary history from colonial times to the mid-1980s is Robert 
Ames Hayes's The Armed Nation. Frank D. McCann's The Brazil- 
ian-American Alliance: 1937-1945 analyzes an important period 
in Brazil-United States military relations, including Brazil's par- 
ticipation in the Italian campaign of World War II. Hernani 
Donato's Diciondrio das batalhas brasileiras provides a good syn- 
optic outline of Brazilian military history, from the colonial 
period until World War II. 

In the case of the individual armed forces, the history of the 
navy is better documented than that of the army and air force, 
thanks to the indefatigable efforts of the navy's own Historical 
Section. Apart from the navy's publications, Arthur Oscar 
Saldanha da Gama's two books on the Brazilian Navy in the two 
world wars provide excellent coverage not only of this aspect of 
the subject but also of the period immediately preceding each 
conflict. The public relations departments of the army and the 



411 



Brazil: A Country Study 



navy publish monthly newsletters ( O Verde Oliva and No Mar, 
respectively) on their respective forces, and these can be useful 
sources of up-to-date information on current developments. 
Informative dissertations done in the early 1990s include Scott 
D. Tollefson's "Brazilian Arms Transfers, Ballistic Missiles, and 
Foreign Policy" and Jorge Zaverucha's "Civil-Military Relations 
During the Process of Transition." 

Deoclecito Lima de Siqueira's Fronteiras: A patrulha aerea e o 
adeus do arco e flecha, although dealing ostensibly only with the 
maritime patrol and antisubmarine warfare activities of the 
Brazilian Air Force during World War II, merits attention for 
the light it throws on the early development of Brazilian mili- 
tary aviation, the impact of United States military assistance, 
and the important role played by the Brazilian Navy and Air 
Force in the latter stages of the Battle of the Atlantic during 
World War II. 

Useful magazines include Tecnologia eDefesa and Flap, which 
deal with general defense and aviation subjects on a bimonthly 
and monthly basis, respectively. Security and defense issues are 
discussed in Seguranca e Defesa. The best sources of up-to-date 
and relatively objective information on Brazilian defense are 
the Spanish monthly magazine Defensa and the two German- 
published Spanish-language magazines Tecnologia Militar and 
Iberoamericana de Tecnologias. (For further information and com- 
plete citations, see Bibliography.) 



412 



Chapter 6. Science and Technology 



A nineteenth-century wood carving made by an indigenous Brazilian tribe, 
from Hjalmar Stolpe, Amazon Indian Designs from Brazilian and Gui- 
anan Wood Carvings 



IN THE 1970s, BRAZIL undertook a major effort to establish a 
strong scientific and technological base that would make the 
country self-sufficient economically, powerful militarily, and 
better able to withstand international pressures and con- 
straints. Heavy investments were made in the country's infra- 
structure for the production of steel, machine tools, energy, 
communications, and transportation. A few high-technology 
projects with expected civilian spinoffs were started in atomic 
energy, aeronautics, and space research. Universities were 
reformed along the so-called United States model of graduate 
education and departmental organization, although they also 
retained strong European characteristics of separate faculties. 
Financing agencies for science and technology were set up and 
endowed generously. Several hundred graduate programs were 
organized, and several thousand fellowships were awarded 
each year for study at universities in the United States and 
Europe. Brazil's effort to strengthen its scientific base attracted 
international attention and was considered an example of how 
a country might move from underdevelopment, poverty, and 
international dependency to economic growth, better living 
standards, and self-reliance. 

During the 1980s, however, Brazil's fast-growing economy 
lost momentum and entered a period of stagnation. The invest- 
ments in science and technology of the previous years were 
insufficient to ward off the forthcoming debt crisis and uncon- 
trolled inflation. The crisis resulted from a combination of fac- 
tors, including the outmoded pattern of domestic economic 
growth through import-substitution industrialization (see Glos- 
sary), the increase in international interest rates and oil prices, 
and the uncontrolled increase in public expenditures resulting 
from decentralization of government and extensive patronage. 
Key questions for the 1990s are what went wrong, and how the 
capabilities created in the 1970s can best be used to regain eco- 
nomic growth and improve social conditions in a profoundly 
transformed international context. 

Modern science and technology are products of Western cul- 
ture and tradition and are not transposed easily to other societ- 
ies and cultures. Nevertheless, the examples of Japan, the 
Republic of Korea (South Korea), and Taiwan show that this 
transposition is possible. A comparison between Brazil and the 



415 



Brazil: A Country Study 

Asian countries points to important differences in the two 
experiences and possible explanations for the different out- 
comes of their science and technology policies. 

Science and technology in Western Europe, and more 
recently in the United States, developed along two parallel and 
mutually reinforcing lines: as part of a broader scientific cul- 
ture, linked to education, the development of modern profes- 
sions, and a growing and prestigious scientific community; and 
as part of the increasingly effective industrial and military 
establishments. The term science is usually applied to the first, 
while technology is used for the latter, with the assumption that 
they are two sides of the same coin. 

The Asian countries, however, followed a strikingly different 
path. They introduced modern technology but little of modern 
science in their universities and other similar institutions; and 
most of their investments in technology were made in indus- 
trial firms, rather than in large, isolated governmental agen- 
cies, including the military sector. Brazil, by contrast, 
developed most of its scientific capabilities in universities, while 
investments in technology went to a few large-scale govern- 
ment projects under the military and to a handful of state- 
owned corporations. 

The assumption in Brazil was that science and technology 
eventually would spill over from higher education and sophisti- 
cated technological projects into society as a whole. In practice, 
the introduction of scientific research and graduate education 
in universities happened at a time of rapid expansion of higher 
education enrollment, leading to declining quality in scholastic 
standards. The consequence was that, while a handful of uni- 
versities and departments reached levels of quality similar to 
those in the developed countries, most higher education insti- 
tutions, private and public, lagged behind. In technology the 
large military-based projects in atomic energy, space research, 
and aeronautics helped in the development of a few, highly 
qualified networks of local suppliers and partners, but they did 
not enhance the quality and competence of the industrial sys- 
tem as a whole. 

In the early 1980s, the policy of technological nationalism 
and self-sufficiency had narrowed to the computer sector, 
where protective legislation tried to shield the Brazilian mini- 
and microcomputer industries from foreign competition. Here 
again, the policy allowed for the growth of local industry and a 
few well-qualified firms, but the effect on the productive capa- 



416 



Science and Technology 



bilities of the economy as a whole was negative; and the inabil- 
ity to follow the international market in price and quality 
forced the policy to be discontinued. 

There are other features found in the Asian countries that 
did not exist in Brazil and that help to explain the different 
outcomes of their development drives. These features include 
an emphasis on basic and secondary education, leading to a 
competent and well-educated manpower base; lower levels of 
social inequality, thereby strengthening the internal market for 
local products; a sustained effort toward international competi- 
tiveness that requires high levels of industrial efficiency and 
quality control; and competent and powerful public bureaucra- 
cies working in close association with a few large and well- 
endowed private firms. 

Historical Evolution 

A brief, historical sketch explains how Brazil's research and 
development institutions were shaped. In very broad terms, 
this history can be divided into seven periods, some of which 
overlap. 

Colonial Science 

"Colonial science" covered the period from the discovery of 
Brazil by the Portuguese in 1500 until the beginning of the 
nineteenth century. Contrary to what happened in many 
regions of Spanish America, the Portuguese did not bring their 
universities to the New World. Whatever existed in terms of sci- 
entific research in those years was done by European explorers, 
who incorporated their findings in the European collections of 
natural history. Economic activities in those years were 
restricted to the production of sugar, gold, and coffee; slave 
labor existed almost to the end of the nineteenth century, and 
work tended to be labor- and land-intensive and unskilled. 

Imperial Science 

The "imperial science" period lasted from 1808, when the 
seat of the Portuguese crown moved to Rio de Janeiro because 
of the Napoleonic Wars, until the beginning of the republican 
period in 1889. The first higher education schools — a military 
academy in Rio de Janeiro, two medical schools, and two law 
schools — were created in the first years of the "imperial sci- 
ence" period, and a few scientific institutions started to appear. 



417 



Brazil: A Country Study 

The search for new mineral riches and the effort to adapt agri- 
cultural products known in Europe and other regions to Brazil 
led to the creation of the first botanical gardens and mineral- 
ogical collections. 

Brazil became independent formally in 1822 and enjoyed a 
period of political stability between 1840 and 1889, during the 
reign of Emperor Pedro II (1840-89). New scientific institu- 
tions were created in this post-independence period, such as 
the Museum of Natural History, the Astronomical Observatory 
of Rio de Janeiro, and the Imperial Geological Commission. 
Foreign scientists were invited to head these institutions, and 
Pedro II himself was very active not only in creating Brazilian 
institutions but also in supporting science in Europe. The kind 
of science being developed in Brazil in those years, although 
similar to that being developed in Europe, was not subject to 
the same standards of quality as its European model. The main 
economic activity in Brazil was the production of coffee for the 
international market, based on slave labor. After the 1850s, 
slave labor was replaced gradually by European and Japanese 
immigrants, and a domestic market for food, textiles, and 
other basic products started to develop. 

Applied Science in Agriculture and Health 

The "applied science in agriculture and health" period cov- 
ers the first decades of the republic, from 1889 to the mid- 
19308. As a republic, Brazil became more decentralized. The 
country's economic pole shifted gradually to Sao Paulo State — 
the center of coffee production and the destination of massive 
European immigration, second only to Buenos Aires in Latin 
America. Most of the new higher education and research insti- 
tutions in those years were created in the city of Sao Paulo. 
They addressed the two main areas of concern in those years: 
public health, particularly the sanitation of the country's main 
port cities, Santos and Rio de Janeiro; and agricultural 
research. The main Sao Paulo State institutions from those 
years were the Agronomic Institute of Campinas (Instituto 
Agronomico de Campinas), the Biological Institute for Animal 
Protection (Instituto Biologico de Defesa Animal), the Butan- 
tan Institute (Instituto Butantan) for snake-venom research, 
the Geological Commission of Sao Paulo State (Comissao 
Geologica do Estado de Sao Paulo), and the Vaccine Institute 
(Instituto Vacinogenico). Also during this period, the scientific 



418 



Science and Technology 



professions expanded and tried to find their place in the mod- 
ernization of Brazilian society. 

The most significant scientific institution in this period, how- 
ever, was the Manguinhos Institute (Instituto Manguinhos), 
now the Oswaldo Cruz Foundation (Fundacao Oswaldo Cruz) 
in Rio de Janeiro. This institute played a central role in the 
control of tropical diseases, such as yellow fever, malaria, and 
parasitic diseases. It developed important research lines in zoo- 
logical fields such as helminthology (worms) and entomology 
(insects), and its researchers were the first to identify the full 
etiology of Chagas' disease. The Manguinhos Institute provided 
the link between Brazilian researchers and the international 
scientific community. Most of Brazil's leading scientists in 
human biology, public health, and related fields were trained 
there. The Manguinhos Institute's success is attributed to the 
ability of its leadership to combine a clear sense of short-term 
objectives with a commitment to the values of scholarship and 
research. 

The Search for Alternatives 

In the "search for alternatives" period in the 1930s, political 
centralization and the first attempt to provide Brazil with mod- 
ern administrative, military, and educational institutions took 
place. The main initiatives included the University of Sao Paulo 
(Universidade de Sao Paulo — USP), which was created in 1934 
as the country's first university. Its nucleus was a School of Phi- 
losophy, Sciences, and Letters, with professors coming from 
France, Italy, Germany, and other European countries. The 
USP also brought together several research and higher educa- 
tion institutions in the state, such as the School of Medicine 
(Faculdade de Medicina), the Polytechnical School (Escola 
Politecnica), and the School of Law (Faculdade de Direito). 
(The Polytechnical School includes civil, electrical, mechani- 
cal, mining, metallurgical, naval and oceanographic, and 
chemical engineering departments.) The USP became and still 
is Brazil's main academic and research institution. Along the 
same pattern, a national university, the University of Brazil 
(Universidade do Brasil), was created in Rio de Janeiro in 1939. 
Today, it is called the Federal University of Rio de Janeiro (Uni- 
versidade Federal do Rio de Janeiro — UFRJ). A third university 
created in Rio de Janeiro in 1935, the University of the Federal 
District (Universidade do Distrito Federal), was closed down by 
the federal government a few years later. 



419 



Brazil: A Country Study 

This model of institutional modernization was also applied 
to the rest of the country. Except for the USP and a few sectors 
at the UFRJ, however, the philosophy schools (Faculdades de 
Filosofia) functioned as teacher colleges and conducted little 
or no research. The traditional professional schools remained 
independent and dedicated to their traditional degree-grant- 
ing activities. 

Deep conceptual differences between the USP and the Uni- 
versity of Brazil help to explain the different institutional devel- 
opment. The Sao Paulo elites created the USP as part of an 
emerging tradition of cultural enlightenment. By contrast, the 
University of Brazil was the product of a centralized and 
authoritarian government, under the direct influence of the 
more conservative sectors of the Roman Catholic Church. 

The first institutions for technological research were created 
in the 1930s. They included the National Institute of Technol- 
ogy (Instituto Nacional de Tecnologia — INT) in Rio de Janeiro 
and the Institute for Technological Research (Instituto de Pes- 
quisas Tecnologicas — IPT) in Sao Paulo. They were supposed 
to provide technical support to an emerging national industry. 
The INT was involved in the first studies on the use of sugar 
cane alcohol for engine combustion and coal from Santa Cata- 
rina State for the steel industry. 

Economic nationalism became dominant by the end of the 
1930s. The 1934 Code of Mines declared as government prop- 
erty all resources under the soil; the first steel plant, the 
National Iron and Steel Company (Companhia Siderurgica 
Nacional — CSN), was established in Volta Redonda in 1942, 
with United States support, and was linked to Brazil's entry into 
World War II; oil exploration became a state monopoly, and 
restrictions were placed on foreign and national private inter- 
ests. 

As the federal administration became more centralized and 
bureaucratized, some of its research institutions suffered. The 
Oswaldo Cruz Foundation went through a crisis for lack of 
autonomy and support. The INT gradually turned into an 
agency that merely provided training courses for the public 
bureaucracy. 

Science and Technology as Modernization, 1945-64 

After World War II, it was generally believed that Brazil was 
becoming a modern, industrial society, and science and tech- 
nology were to be important components of this trend. Two 



420 




A pharmaceutical student prepares to place samples into an amino 

acid analyzer. 

A lab technician trims plant tissue from cassava plants in order to 
reproduce disease-free clones of these plants in test tubes. 
Courtesy Inter-American Development Bank, Washington. 



421 



Brazil: A Country Study 

diverging patterns were already taking shape in the develop- 
ment of science, technology, and higher education in Brazil, 
roughly corresponding to the broad cleavage in Brazilian soci- 
ety between the economic and political centers of Sao Paulo 
and Rio de Janeiro. The first was more entrepreneurial and 
associative, with strong civilian institutions. The second was 
more hierarchical, relying on the civilian and military bureau- 
cracies, and was linked to the country's poorer regions through 
patronage. 

Sao Paulo already had the country's main university, and 
after World War II the Southeast (Sudeste) Region's scientists 
organized two leading institutions, the Brazilian Society for Sci- 
entific Development (Sociedade Brasileira para o Progresso da 
Ciencia — SBPC) and the Sao Paulo State Federation to Sup- 
port Research (Fundacao de Amparo a Pesquisa do Estado de 
Sao Paulo — FAPESP). The SBPC became Brazil's main volun- 
tary association for Brazilian academics and has been very 
influential in voicing the scientific community's concerns on 
national issues, such as protection of intellectual freedom in 
the years of the military regime, promotion of a national com- 
puter industry, and opposition to strict patent legislation. The 
FAPESP was organized as a very efficient and respected grant- 
giving agency, which ran according to strict peer-review proce- 
dures. It received about 1 percent of the state tax revenues. In 
addition to the USP, FAPESP, IPT, and SBPC, the state of Sao 
Paulo had sixteen other research institutes linked to different 
branches of the state administration. It also had another 
research-oriented university, the Campinas State University 
(Universidade Estadual de Campinas— Unicamp), and a state- 
wide university devoted to professional education, Sao Paulo 
State University (Universidade Estadual Paulista — Unesp). 

The national government, meanwhile, embarked on its first 
attempt to muster the power of atomic energy. This effort was 
made through the combined creation of the National Research 
Council (Conselho Nacional de Pesquisas — CNPq), now called 
the National Council for Scientific and Technological Develop- 
ment (Conselho Nacional de Desenvolvimento Cientffico e 
Tecnologico — CNPq), which kept the traditional acronym, 
CNPq; the National Nuclear Energy Commission (Comissao 
Nacional de Energia Nuclear — CNEN); and the Brazilian Cen- 
ter for Physics Research (Centro Brasileiro de Pesquisas Fisi- 
cas — CBPF). Together, these three institutions were supposed 
to develop the full cycle from the production of nuclear fuel to 



422 



Science and Technology 



its application in energy generation, and eventually the tech- 
nology of atomic weaponry. Beleaguered by limited resources, 
lack of qualified leadership, and international pressures, the 
atomic energy project was effectively abandoned at the end of 
the second Getulio Dorneles Vargas government (president, 
1930-45, 1951-54) in 1954. The CNPq was turned into a small, 
underfunded, grant-giving agency. After its reorganization in 
the 1970s, the CNPq absorbed the CBPF, by then an academic 
research center, as one of its institutes (see Nuclear Programs, 
this ch.). 

One of the most successful institutes of the 1950s, the Aero- 
nautical Technology Institute (Instituto Tecnologico de 
Aeronautica — ITA), was placed in the city of Sao Jose dos Cam- 
pos, between Rio de Janeiro and Sao Paulo. The Brazilian Air 
Force (Forca Aerea Brasileira — FAB) organized the ITA with 
the support of the United States government, working in close 
association with the Massachusetts Institute of Technology. 
However, the ITA was not restricted to military students and 
subjects; it became Brazil's leading engineering school, recruit- 
ing students from all over the country. ITA graduates went on 
to occupy central positions in Brazil's industries, research insti- 
tutions, and main science and technology agencies. The ITA's 
research branch, the Aerospace Technical Center (Centro Tec- 
nico Aeroespacial — CTA), became the basis for Brazil's air- 
plane industry and made Sao Jose dos Campos the hub of 
Brazil's most sophisticated technological industries. What was 
unique about the ITA was this combination of strong govern- 
ment support, qualified institutional leadership, and civilian 
orientation. The latter gave it the ability to tap some of the best 
talent among the country's researchers and students. As a 
result of the military governments after 1964, the ITA gradually 
lost its autonomy and civilian character and entered a period of 
decline. 

The Great Leap Forward, 1968-79 

In the so-called "great leap forward" period, the Brazilian 
military government, which took power in 1964, embarked on 
its ambitious program of scientific and technological self-suffi- 
ciency. In the first years, the military government entered into 
conflict with a significant part of the country's scientific leader- 
ship, because of the latter's real or assumed socialist stands. 
The two sides later reconciled, however, because of their 
shared nationalism and concern with social and economic 



423 



Brazil: A Country Study 

development. The move toward scientific self-sufficiency 
reached its climax during Ernesto Geisel's presidency (1974- 
79), which scientist Reinaldo Guimaraes describes as a period 
of "enlightened despotism." The main initiatives in this period 
included the university reform in 1969 that introduced gradu- 
ate educadon and organized the universities into departments 
and institutes. 

In the "great leap forward" period, science and technology 
became linked institutionally to the economic authorities. The 
federal government created support agencies and programs 
under a newly created Planning Ministry or the Secretariat of 
Planning and Coordination of the Presidency of the Republic 
(Secretaria de Planejamento e Coordenacao da Presidencia da 
Republica — Seplan). The National Bank for Economic and 
Social Development (Banco Nacional de Desenvolvimento 
Economico e Social — BNDES), Brazil's main investment bank, 
created a special fund for science and technology, which led to 
a new agency, the Funding Authority for Studies and Projects 
(Financiadora de Estudos e Projetos — Finep). The Finep was 
organized as a private corporation under ministerial supervi- 
sion and was responsible for the administration of the National 
Fund for Scientific and Technological Development (Fundo 
Nacional de Desenvolvimento Cientffico e Tecnologico — 
FNDCT), which has provided institutional grants for techno- 
logical projects for research and development in public and 
private nonprofit institutions. The FNDCT's annual budget in 
the mid-1970s was around US$200 million but was reduced 
gradually to about US$40 million by the early 1990s. 

The 1968-79 period also saw the establishment of two large 
research and graduate institutions in science and technology: 
the Coordinating Board of Postgraduate Programs in Engi- 
neering (Coordenacao dos Programas de Pos-Graduacao em 
Engenharia — Coppe) at both the UFRJ and Unicamp. Both 
institutions were oriented toward research and training in 
advanced engineering (chemical, mechanical, biomedical, 
electric, metallurgical, nuclear, and naval) and in new technol- 
ogies derived from recent advances in solid-state physics and 
lasers. Other institutions also benefited, such as the Technol- 
ogy Center (Centro de Tecnologia) of the Pontifical Catholic 
University of Rio de Janeiro (Pontificia Universidade Catolica 
do Rio de Janeiro — PUC-RJ), the Polytechnical School at the 
USP, and the ITA. The PUC is Brazil's only private university 
that produces a significant amount of scientific research. 



424 



The Brazilian Air Force's AMX ground-attack fighter, made by 
Brazilian Aeronautics Company (Empresa Brasileira Aerondutica — 

Embraer) 
Courtesy Embraer 

Initiatives in the 1968-79 period also included the coopera- 
tion agreement with the Federal Republic of Germany (West 
Germany) for the development of nuclear technology, fol- 
lowed by the development of the so-called Parallel Program 
(Programa Paralelo), a secret program for nuclear weapons 
development; the beginning of the space program, with the 
development of a satellite launch vehicle and a satellite; the 
development of a subsonic military jet aircraft (the AMX 
project, in association with Italy); the adoption of a market pro- 
tection policy for the computer industry; and the writing of 
three successive national plans for scientific and technological 
development. Another initiative included the creation of 
research and development centers within the country's main 
state-owned corporations, such as the Brazilian Petroleum Cor- 
poration (Petroleo Brasileiro — Petrobras), Brazilian Telecom- 
munications, Inc. (Telecomunicoes Brasileiras S.A. — Telebras), 
and the Brazilian Electric Power Company, Inc. (Centrais 
Eletricas Brasileiras S.A. — Eletrobras). In addition, a national 



425 



Brazil: A Country Study 

system for agricultural research was reorganized and strength- 
ened through the Brazilian Agriculture and Livestock Research 
Enterprise (Empresa Brasileira de Pesquisa Agropecuaria — 
Embrapa), under the Ministry of Agriculture. 

On the positive side, these initiatives were characterized by 
abundant funding resources, quick-decision mechanisms, and 
some relative flexibility in the use of the grants. Even for large 
projects, resources were provided whenever possible to the 
group leader, in a deliberate bypass of the traditional, cumber- 
some, and ineffectual procedures of public administration. On 
the other hand, the absence of well-defined peer-review proce- 
dures, particularly at Finep, allowed for the support of less than 
worthy groups and projects, which became permanent clients 
of FNDCT resources. 

More serious was the lack of consistency that existed 
between science and technology policies, oriented toward self- 
sufficiency and a strong presence of the public sector, and the 
economic policies of the same period, which opened Brazil to 
multinational corporations and the acquisition of ready-made, 
turnkey technologies from abroad. The result was that the 
research seldom benefited the productive sector, except in 
three main areas: in agriculture, mostly through the develop- 
ment of new varieties of sugar cane, corn, soybeans, coffee, 
fruits, and other crops; in a few sectors where government 
research and development centers — such as the Army Technol- 
ogy Center (Centro Tecnologico do Exercito — CTEx), the 
CTA, and those of Eletrobras, Petrobras, and Telebras — linked 
with industry and established technical standards for commu- 
nications equipment and other products; and in the area of 
computing, where the government tried to link research and 
production by Brazilian private firms under the umbrella of 
market protection. 

Science and Technology as a Pressure Group, 1979-90 

In the "science and technology as a pressure group" period, 
which started at the beginning of the last military presidency of 
Joao Baptista de Oliveira Figueiredo (1979-85) and included 
the first civilian government of Jose Sarney (1985-90), the pic- 
ture changed completely. The Planning and Economy minis- 
tries were unified, and the science and technology sector lost 
its privileged access to the higher echelons; no resources were 
available to correspond to the increasing expectations of the 
previous years; scientists, engineers, and public employees in 



426 



Science and Technology 



the science and technology sector became one among many 
different interest groups competing for resources from a gov- 
ernment concerned only with its political survival and the 
administration of a mounting external debt and inflation. 

The Computer Industry Policy 

The "informatics" policy started in the late 1960s and early 
1970s as an effort to develop a Brazilian personal computer 
(with the USP's Engineering School working on hardware and 
the PUC-RJ on software, and with support from the navy and 
the Finep). Technology was to be transferred to a state-owned 
corporation, Brazilian Computers and Systems (Computadores 
e Sistemas Brasileiros — Cobra), and to private firms owned by 
Brazilians. With the development of personal computers, a pol- 
icy was devised that restricted this new market to Brazilian 
firms but allowed for the continuous presence of multinational 
corporations, particularly in the area of mainframe computers. 
Congress approved the policy in 1985. The central tenet of the 
legislation was the strict ban, for seven years, on the import of 
microcomputers and on the establishment of foreign firms 
producing microcomputers and software. The Computer Tech- 
nology Center (Fundacao Centro Tecnologico para 
Informatica — CTI) was established in 1983 to encourage the 
development of scientific and technological research in the 
computer sector. A national office for the computer industry, 
the Special Secretariat for Informatics (Secretaria Especial de 
Informatica — SEI), was established in Brasilia. It had the power 
to control the import of equipment and components, to set tar- 
gets for increasing Brazilian participation in joint ventures with 
foreign firms working in Brazil, and to decide about govern- 
ment purchases of computer equipment. 

The policy was conceived not only to limit the small com- 
puter market to national firms but also to stimulate the local 
production of products and components, which was part of a 
broader policy of import substitution. Both Brazilian and mul- 
tinational firms were required to increase the share of domes- 
tic content in their products. This requirement boosted the 
development of local competence but also led to higher costs 
and a loss of competitiveness, given the lack of scale in the local 
market. This strategy of mandatory high percentages of local 
components in all items, including disk drives and printers, 
contrasts with that of South Korea, for example, which concen- 
trated on a few components, such as monitors, where the local 



427 



Brazil: A Country Study 

industry could compete internationally in terms of quality and 
price. 

To protect the local industry, the government introduced 
mechanisms to prohibit the transfer of technologies that were 
similar to ones being developed or that already had been devel- 
oped by Brazilian companies. This policy was applied to both 
hardware and software, and Brazilian firms developed emula- 
tors of MS-DOS and Unix computer operating systems for the 
local industry. As a result, companies that could bypass this leg- 
islation and get the original software were in a better position 
than those that remained attached to much less advanced local 
products. 

This protectionist policy was very controversial and drew 
strong opposition from the United States government and mul- 
tinational firms, in the name of free trade. It also drew opposi- 
tion from Brazilian firms and corporations that thought their 
access to high technology had been curtailed. Supporters 
argued that the policy generated technological competence in 
Brazilian firms and created employment for researchers and 
engineers at little cost to industry or Brazil. Detractors argued 
that the whole industrial sector suffered from restrictions on 
access to state-of-the-art electronics and, more generally, that 
Brazil was delayed in entering the microcomputer culture. In 
practice, the civilian government under Sarney did not invest 
in research and development for the computer industry, and a 
large part of that industry remained limited to the assemblage 
of microcomputers with imported components. A few firms 
have specialized in some market niches (such as bank automa- 
tion) and, after 1992, entered into associations with multina- 
tional corporations for the development and distribution of 
international microcomputer brands in Brazil. 

Science for Industrial Competitiveness 

The World Bank (see Glossary) approved a US$72 million 
sector loan in 1985 (with another US$107 million to be pro- 
vided by the Brazilian government) to increase the country's 
competence in selected areas of science and technology. The 
underlying assumption had been that the government would 
maintain the historical levels of expenditures for the sector as a 
whole. This expectation was not fulfilled, and the World Bank's 
program, called the Program in Support of Scientific and Tech- 
nological Development (Programa de Apoio ao Desenvolvi- 
mento Cientifico e Tecnologico — PADGT), became one of the 



428 



Science and Technology 



few sources of support for scientific research, although it did 
not contribute directly to an improvement in Brazil's industrial 
competitiveness. 

The brief Fernando Collor de Mello presidency (1990-92) 
called for making science and technology more directly rele- 
vant to industrial effectiveness, in an economy that was being 
deregulated and subjected to international competition. It was 
also a period of high inflation, economic depression, and polit- 
ical crisis. The main initiatives and proposals, some dating 
from the previous years, included the continuation of the 
World Bank sector loan to science and technology; the trans- 
formation of Finep into an agency concerned almost exclu- 
sively with loans for the development of industrial technology; 
a sharp reduction in the FNDCT's budget; the end of market 
protection for the Brazilian computer industry; major reduc- 
tions in the resources available to the GNPq, which became 
restricted to the administration of fellowships; proposals to cre- 
ate strong links between universities and the productive sector 
through "technological parks" and other mechanisms of uni- 
versity-industry cooperation; the closing down, phasing out, or 
revising of large military projects, such as the Parallel Program 
and the space program; and the privatization of most publicly 
owned corporations. 

Several measures related to the opening of Brazil's economy 
were carried out and are still in effect. However, little progress 
was made in turning the science and technology sector in new 
directions. Economic depression limited industrial invest- 
ments, while inflation channeled available resources to the 
financial markets. The scientific community viewed the Collor 
government with distrust. 

The Itamar Franco government (1992-94), which succeeded 
Collor de Mello after his impeachment on corruption charges, 
was unable to overcome the country's runaway inflation until 
mid-1994 and did not have a chance to devise a science and 
technology policy. The minister of science and technology, Jose 
Israel Vargas, an internationally respected physicist with consid- 
erable credibility in Brazil, worked to keep the issues of science 
and technology high on the government agenda. He sought to 
pass legislation that would create incentives for technology 
investments in industry and that would revive Brazil's space 
program. In addition, he was committed to ensuring the bare 
minimum of resources for the daily activities of the govern- 



429 



Brazil: A Country Study 

merit's main science and technology agencies. No long-term 
policy seemed to exist, however. 

Administration of Science and Technology 

The Ministry of Science and Technology 

The central agency for science and technology in Brazil is 
the Ministry of Science and Technology, which includes the 
CNPq and Finep. This ministry also has direct supervision over 
the National Institute of Space Research (Instituto Nacional de 
Pesquisas Espaciais — INPE), the National Institute of Amazon 
Region Research (Instituto Nacional de Pesquisas da 
Amazonia — INPA), and the National Institute of Technology 
(Instituto Nacional de Tecnologia — INT). The ministry is also 
responsible for the Secretariat for Computer and Automation 
Policy (Secretaria de Politica de Informatica e Automacao — 
SPIA), which is the successor of the SEI (see fig. 18). 

The Ministry of Science and Technology, which the Sarney 
government created in March 1985, was headed initially by a 
person associated with the nationalist ideologies of the past. 
Although the new minister was able to raise the budget for the 
science and technology sector, he remained isolated within the 
government and had no influence on policy making for the 
economy. In addition, inflation brought the science and tech- 
nology budget to extremely low levels. 

With the new ministry, the science and technology agencies 
increased in size but lost some of their former independence 
and flexibility, and they became more susceptible to patronage 
politics. Most of the resources of the CNPq were channeled to 
fellowship programs that had no clear procedures for quality 
control and no mechanisms to make the fellows active in the 
country's science and technology institutions. New groups 
competed for resources and control of the country's agencies 
of science, technology, and higher education. These groups 
included political parties, unionized university professors and 
employees, scientific societies, and special interest groups 
within the scientific and technological community. The SBPC 
(Brazilian Society for Scientific Development) shed its image as 
a semi-autonomous association of scientists to become an active 
lobbyist for more public resources and the protection of 
national technology from international competition. 



430 



Science and Technology 



National Council for Scientific and Technological Develop- 
ment 

The National Council for Scientific and Technological 
Development (Conselho Nacional de Desenvolvimento Cienti- 
fico e Tecologico — CNPq) is a complex structure with about 
2,500 employees. It runs an extensive program of fellowships 
and research grants; several special programs, such as the 
National Program for Human Resource Training for Techno- 
logical Development (Programa Nacional de Capacitacao de 
Recursos Humanos para o Desenvolvimento Tecnologico — 
RHAE) and the Program for Competitiveness and Technologi- 
cal Diffusion (Programa de Apoio a Competividade e Difusao 
Tecnologica — PCDT) ; and integrated programs, such as those 
on endemic diseases, virology, genetics, agricultural develop- 
ment, and humid and semiarid tropical regions. Fellowships 
and research grants are provided under peer-review evalua- 
tions, whereas most of the resources for the special programs, 
when available, are managed directly by the administration. 

The CNPq also has several research institutes of its own: 
those in Rio de Janeiro include the Brazilian Center for Physics 
Research (Centro Brasileiro de Pesquisas Ffsicas — CBPF), the 
Mineral Technology Center (Centro de Tecnologia Mineral — 
Cetem), the Institute of Pure and Applied Mathematics (Insti- 
tuto de Matematica Pura e Aplicada — IMPA), the National 
Observatory (Observatorio Nacional — ON), the Museum of 
Astronomy and Related Sciences (Museu de Astronomia e 
Ciencias Afins — MAST), and the National Computer Science 
Laboratory (Laboratorio Nacional de Computacao Cientf- 
fica — LNCC). Others include the Brazilian Institute of Scien- 
tific and Technological Information (Instituto Brasileiro de 
Informacao em Ciencia e Tecnologia — IBICT) in Brasilia, the 
National Astrophysics Laboratory (Laboratorio Nacional de 
Astrofisica — LNA) in Itajuba (Minas Gerais), the Emflio Goeldi 
Museum of Para (Museu Paraense Emflio Goeldi — MPEG) in 
Belem, and the National Syncrotron Light Laboratory (Labo- 
ratorio Nacional de Luz Sfncrotron — LNLS) in Campinas. 
These institutes vary in quality and size, and many of them have 
their own graduate education programs. The minister of sci- 
ence and technology appoints the president and directors of 
the CNPq, and a twenty-member Deliberative Council (Con- 
selho Deliberativo), which includes numerous scientists, super- 
vises it. 



431 



Brazil: A Country Study 



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432 



Science and Technology 



The activities of the CNPq are divided formally into fellow- 
ships and grants, research, information, and dissemination 
activities. The CNPq spent about US$350 million in all its activ- 
ities in 1990, and US$371 million in 1991. About 70 percent of 
the total is used for development, 10 percent for research, and 
20 percent for administrative and other expenses. Eighty-one 
percent of development funds go to fellowships. Most of the 
fellowships are given to a small number of undergraduate and 
M.A.-degree students, reflecting the limited demand that exists 
for advanced degrees (see table 32, Appendix). 

The Funding Authority for Studies and Projects 

The second main agency in the Ministry of Science and 
Technology is the Funding Authority for Studies and Projects 
(Financiadora de Estudos e Projetos — Finep). The minister of 
science and technology appoints the president and directors of 
the Finep, without any external peer review. The Finep tradi- 
tionally has worked along two different lines: it administers the 
FNDCT, and it serves as a specialized bank that makes loans to 
the private sector for technological development and innova- 
tion. In practice, the Finep's activity in the early 1990s was lim- 
ited mostly to loan contracts for research and development 
projects in industry. However, because of the economic reces- 
sion and market interest rates, there were few takers (see table 
33, Appendix). 

The Coordination of High-Level Personnel Training 

Another important agency involved in science and technol- 
ogy is the Council for Advanced Professional Training 
(Fundacao Coordenacao de Aperfeicoamento de Pessoal de 
Nivel Superior — CAPES) at the Ministry of Education. The 
CAPES provides fellowships for graduate education in Brazil 
and abroad and for several years has run a peer-reviewed evalu- 
ation system for the country's graduate programs. The fellow- 
ship program is divided into two parts: one responds to 
individual applications and the other to the Faculty Improve- 
ment Integrated Program (Programa Integrado de Capaci- 
tacao de Docentes — PICD) (see table 34, Appendix). The 
GAPES also has administered some FNDCT grants. 

Other Activities by the Federal Government 

Together, the CNPq, CAPES, and Finep are responsible for 



433 



Brazil: A Country Study 

the administration of the World Bank-supported PADCT pro- 
gram, under the coordination of the Ministry of Sciene and 
Technology. Generally, the agencies under the ministry do not 
handle more than a third of the country's total science and 
technology federal budget, with another third going to projects 
in the military sector (see table 35, Appendix). Another major 
agency is the Brazilian Agriculture and Livestock Research 
Enterprise (Embrapa), which has a budget equivalent to that of 
the CNPq. The traditional Oswaldo Cruz Foundation in Rio de 
Janeiro remains an important research institution in public 
health and related fields. 

Science and Technology in the States 

State budgets allotted about US$300 million for science and 
technology in 1991, with the state of Sao Paulo accounting for 
40 percent of spending, and the states of Minas Gerais, Rio de 
Janeiro, and Bahia accounting for 35 percent. After 1988 most 
Brazilian states established in their constitutions a fixed per- 
centage of their budgets to be given to the state-level science 
and technology sector. They followed the example of Sao 
Paulo, which provides the FAPESP (Sao Paulo State Federation 
to Support Research) with about 1 percent of state tax reve- 
nues (this amounted to about US$60 million in 1991). How- 
ever, Sao Paulo is the only state where the constitutional rule is 
followed strictly. 

The Sao Paulo Science and Technology System 

The FAPESP is just one part of a large science, technology, 
and higher education sector run by the state of Sao Paulo that 
includes three public universities and several research insti- 
tutes. These activities are coordinated by the state Secretariat 
for Science, Technology, and Economic Development (Secre- 
taria de Ciencia, Tecnologia e Desenvolvimento Economico — 
SCTDE). However, most of the institutions under the SCTDE — 
the three universities, the FAPESP, and the IPT (Institute for 
Technological Research) — are autonomous. The Institute for 
Nuclear and Energy Research (Instituto de Pesquisas Energeti- 
cas e Nucleares — IPEN), located on the USP campus, is also 
linked formally to the SCTDE but in practice is run by the fede- 
ral government. The SCTDE also runs the State Foundation 
for Scientific and Technological Development (Fundo Estad- 
ual de Desenvolvimento Cientifico e Tecnologico — Funcet), 
which provides loans to the private sector, cooperatives, and 



434 



Science and Technology 



associations, in collaboration with the Sao Paulo State Bank 
(Banco do Estado de Sao Paulo — Banespa) . Funcet has a bud- 
get of about US$20 million and a grant program through its 
Department of Science and Technology (Departamento de 
Ciencia e Tecnologia — DCET) (see table 36, Appendix). 

Research and Development 

A comparison between science in Brazil and science in other 
Latin American countries and in Israel helps to place Brazilian 
scientific research in a broader context. According to a 1994 
study prepared by scientist Thomas S. Shott, Brazil performs 
less than 1 percent of the scientific research in the world. No 
Brazilian scientist was mentioned in a survey that cited nearly 
3,000 scientists as principal contributors or as influential. Bra- 
zilian research amounted to a little less than half the research 
performed in Latin America and about a third of that per- 
formed in Israel, where scientific performance is high. 

In economy and population, Brazil is roughly half the size of 
the rest of Latin America. However, Brazil is a whole order of 
magnitude larger than Israel in terms of the economy and even 
more in terms of population, and yet far less research is per- 
formed in Brazil than in Israel. Brazilian specialization empha- 
sizes the disciplines of physics, biology, and mathematics. 
Brazilian research focuses on biomedicine and earth and space 
science and de-emphasizes clinical medicine and chemistry. 
Within medicine, however, tropical medicine and parasitology 
are fields of strong specialization in Brazil, as in the rest of 
Latin America. Brazilian growth has been highest in technolog- 
ical science, especially in computing. 

Brazilian scientists are tied to colleagues, both Brazilian and 
foreign, who have influenced their research and who are col- 
laborators or competitors in research. Cooperation and collab- 
oration between Brazilian researchers and the scientific 
establishment in the rest of Latin America are also higher. 
Additional factors promoting scientific ties are social and cul- 
tural linkages between Brazil and the rest of Latin America. 

Although regional integration is noticeable, it is overshad- 
owed by the influence of scientific centers in North America 
and Western Europe. Brazilian scientists value their visits to 
these centers. The involvement of Brazilian scientists with the 
centers, however, has been slightly less than the participation 
of other Latin American scientists and much less than that of 
Israeli scientists. 



435 



Brazil: A Country Study 

University Research and Graduate Education 

Most of Brazil's research and development activities take 
place in its main public universities. There are about 1.5 mil- 
lion higher education students, around 10 percent of the age 
cohort, distributed in federal (21.1 percent), state (12.7 per- 
cent), municipal (5.1 percent), and private institutions (61.1 
percent). There are about 15,000 active scientists and research- 
ers in Brazil, and about 1,000 graduate programs in most fields 
of knowledge. 

Research in universities usually is associated with graduate 
education, although relatively few university professors hold a 
doctoral degree. These professors are concentrated in the Sao 
Paulo State system, which is responsible for more than 50 per- 
cent of the doctoral degrees granted, and in some of the best 
federal universities (see table 37, Appendix). 

Most academics in public institutions have full-time con- 
tracts, and their salaries are equivalent to those obtained in pri- 
vate schools. The assumption is that they should combine 
teaching with research, but in practice few have the necessary 
training for research work. The universities provide physical 
space and salaries for research, but little else; the researcher, or 
the research group, has to seek out support money and 
research grants. In most cases, the researcher applies for grants 
from the CNPq and FAPESP or from some private foundation 
in Brazil or abroad. Equipment and library holdings in the uni- 
versities usually are obtained through special grants and 
projects from Finep or from occasional programs run by the 
government, in some cases with resources from the World 
Bank or the Inter-American Development Bank (see Glossary) . 
Researchers can also enter into cooperative research projects 
with public and private corporations, or with the government 
itself. Unicamp (Campinas State University), for instance, had 
an important cooperative agreement with Telebras, Brazil's 
communications holding; and the Goppe (Coordinating Board 
of Postgraduate Programs in Engineering) has worked with 
Petrobras in the development of technologies for deep-sea oil 
drilling. The Federal University of Santa Catarina is well known 
for its Institute of Mechanical Engineering (Instituto de Engen- 
haria Mecanica — IEM) and has a large portfolio of research 
and development contracts with private institutions. The more 
entrepreneurial and competent departments and institutes 
obtain resources that enable them to work according to high 
standards of efficiency. Others, in the same institution, may not 



436 



Science and Technology 



have the means to purchase a computer or even to renew jour- 
nal subscriptions. 

Research in State-Owned Corporations 

About 10 percent of the public investments in research and 
development in Brazil are made by a small group of state- 
owned corporations and holdings in the fields of telecommuni- 
cations, oil, electric energy, mining, metallurgy, and aeronau- 
tics. Several of these corporations have created their own 
research and development centers, the best known being 
Petrobras's Research and Development Center (Centro de Pes- 
quisa e Desenvolvimento — Cenpes), Telebras's Research and 
Development Center (Centro de Pesquisa e Desenvolvi- 
mento — CPqD), Eletrobras's Electric Power Research Center 
(Centro de Pesquisas de Energia Eletrica — Cepel), the Tech- 
nology Center (Centro de Tecnologia) of the Rio Doce Valley 
Company (Companhia Vale do Rio Doce — CVRD), and the 
CTA (Aerospace Technical Center), associated with the Brazil- 
ian Aeronautics Company (Empresa Brasileira Aeronautica — 
Embraer), the state-owned aircraft manufacturer. 

At their best, these research centers are linked with the com- 
panies' suppliers and are responsible for establishing standards 
of quality and providing technical know-how. They also com- 
municate with other research and development groups in gov- 
ernment and universities in order to exchange ideas and 
information and bolster professional competence. These 
research centers played important roles in the 1970s and early 
1980s. They saved foreign currency that would have been spent 
on technical assistance and royalties, improved their compa- 
nies' operational capabilities, better utilized Brazil's natural 
resources, strengthened the private sector's competence, and 
provided resources to universities through research contracts 
and programs of technical assistance and training. 

The oldest and largest of these centers is Cenpes, which, 
under different names, has existed since the creation of Petro- 
bras in the mid-1950s. Cenpes's most significant achievement 
was the development of state-of-the-art technologies for deep- 
sea oil drilling, in association with Coppe at the UFRJ (Federal 
University of Rio de Janeiro) and several other Brazilian uni- 
versities. Cenpes, which is located on the UFRJ campus, main- 
tains links with research institutions in the United States, 
Britain, and other countries and provides research services for 
other clients. Nonetheless, the proportion of resources spent 



437 



Brazil: A Country Study 

by Petrobras on research and development is significantly 
lower than the international average for large oil companies. 
In 1994 Cenpes had 1,656 employees. Its annual budget has 
ranged from US$134.2 million in 1987 to US$102.7 million in 
1991, which corresponds to a figure of between 0.5 percent 
and 0.8 percent of Petrobras's gross revenues. 

Telebras's research center, the CPqD, has played an impor- 
tant role in setting the standards for Brazil's telecommunica- 
tion systems. Foreign companies in Brazil are requested to 
adopt these standards, local companies receive support to train 
personnel and to develop technological competence, and the 
government guarantees the purchase of products that meet 
Telebras's standards. The consequence has been the creation 
of several dozens firms linked to the Telebras system and pro- 
tected from competition. The CPqD's budget is around US$50 
million a year, and it has 1,200 employees. 

These research centers usually are much better endowed 
with equipment, staff, and resources than research groups in 
universities and academic institutes. However, because they are 
shielded from outside review and from financial constraints, it 
is uncertain whether their performance is commensurate with 
their costs. Because of economic stagnation, their budgets were 
reduced in the late 1980s, and lower salaries led to the loss of 
their best researchers. In the new environment, they have been 
compelled to redefine their functions in two ways. First, they 
have had to stay much closer to the direct operational needs of 
their institutions and forsake long-term and technologically 
more ambitious projects; second, they have had to look for 
independent sources of support, whether by selling their ser- 
vices or by establishing associations with the private sector and 
other research and development institutions. Privatization has 
led to the shutdown of some of these research groups, as hap- 
pened in some steel companies. 

Technological Research in the Private Sector 

Research and development in the private sector in Brazil 
take place among companies that participate in the interna- 
tional market and among those working in areas where the gov- 
ernment has required or supported the development of local 
technology. "Required" areas include telecommunications and 
computers; "supported" areas include agriculture and military 
equipment. In addition, a few companies have adopted 
medium- and long-term strategies based on technological inno- 



438 



Technicians at a 3,200- 
kilowatt impulse generator of 
the Electrical Engineering and 
Electronics Central 
Laboratory 's High Voltage 
Testing facility, Curitiba, 
Parana State 
Courtesy Inter-American 
Development Bank, 
Washington 




vation. An estimated 200 companies have significant invest- 
ments in research and development in Brazil. In 1985, 1,241 
firms were on record as having declared some investment in 
research and development, totaling about US$300 million. 
These firms were responsible for 30 percent of the total reve- 
nues of the private industrial sector. Detailed surveys have 
shown that only 0.5 percent of persons with Ph.D. degrees in 
the country work in the private sector, that few firms have 
defined budgets for research and development, and that 
projects tend to be small and short-lived. 

Centers of Excellence 

Scientist Jacques Marcovitch conducted a detailed 1992 
study, entitled Centers of Excellence in PeD in Brazil, on a small 
group of high-quality research centers in an attempt to identify 
the reasons for their success. They were Petrobras's Cenpes, in 
Rio de Janeiro; the Institute of Mechanical Engineering of the 
Federal University of Santa Catarina, in Florianopolis; the 
Heart Institute (Instituto do Coracao) at USP; the Butantan 
Institute, belonging to Sao Paulo State's SCTDE; IMPA (Insti- 
tute of Pure and Applied Mathematics), associated with the 
CNPq, in Rio de Janeiro; the research center of Light Metal, 



439 



Brazil: A Country Study 

Inc. (Metal Leve S.A.), a leading Brazilian manufacturer of car 
and airplane components; the research center of Rhodia-Pou- 
lenc, a French chemical industrial group, in Paulinia, Sao 
Paulo; and the soybean research program at the Federal Uni- 
versity of Vicosa, Minas Gerais. 

Despite their different contexts and purposes, all these cen- 
ters of excellence — government institutes, university research 
centers, and research and development units in private and 
public corporations — shared a common set of features. First, 
they benefited from their external environment, including the 
availability of financial support, different types of incentives, 
market niches, or well-identified local opportunities. A well- 
established and competent leadership identified these oppor- 
tunities and put them to proper use. Second, they made world- 
class contributions in their fields of knowledge. This was true 
even for IMPA, which works in the most abstract fields of math- 
ematics but still has an important impact on the teaching of 
mathematics at all levels in Brazilian education. Third, the 
leaderships of these centers shared an entrepreneurial spirit. 
The most outstanding researchers or institution-builders all 
shared the ability to identify successful goals for their institu- 
tion, to garner resources, and to identify talent. Fourth, the 
leaders of these institutions had an ability to find a proper 
organizational model. According to Marcovitch, these entre- 
preneurs found innovative mechanisms that freed them from 
bureaucratic labyrinths, and they adopted institutional frame- 
works that supported the achievement of their goals. Constant 
organizational adaptations, specialized, task-oriented units, 
efficient decision making, and consensus among the leaders 
and the researchers were key features of success. 

These conditions of success also help to explain why the cen- 
ters of excellence are the exception rather than the rule 
among Brazilian research institutions. Most research centers in 
universities and government institutions follow civil service 
rules, which favor fixed procedures and conformity rather than 
entrepreneurship and managerial flexibility. Protected until 
recently by strong trade barriers or state monopolies, Brazilian 
companies did not make efficiency and innovation their priori- 
ties, and either did not invest in research and development or 
did not use products derived from their research and develop- 
ment units. If Brazilian science is to play a significant role in 
the country's future, Brazil's institutions need an environment 
of entrepreneurship, quality, and institutional flexibility that is 



440 



Science and Technology 



typical of its centers of excellence. Only then can these centers 
become the rule rather than the exception. 

Policy Perspectives 

Brazil has developed a significant infrastructure for 
research, development, and innovation. Nevertheless there is a 
clear need to redirect the entire science and technology sector 
from the patterns established in the 1970s to others more in 
line with the realities of the 1990s. This new pattern should 
bring this sector much closer to the educational and produc- 
tive sectors. 

The fact that most Brazilian researchers and research 
projects are in the universities does not mean that they are as 
involved with professional, technical, and general education. 
Areas in need of improvement include establishing closer links 
between science and technology and the productive sector and 
stimulating the private sector to increase its share of the coun- 
try's research and development efforts. Both cases require mov- 
ing from a vertical approach, concerned with graduate 
education, leading-edge technology, and large science projects, 
to a more horizontal one, aimed at increasing the general level 
of competence of the population and the productive system as 
a whole. This change in emphasis requires that the institutions 
providing support and incentives to science also be changed. 
The two traditions of research and education that exist in Bra- 
zil — one more associative, based on the civil society, and more 
entrepreneurial; the other more hierarchical, centralized, and 
bureaucratic — point to the main direction of change, from the 
second to the first. Research groups and institutions need to 
increase their autonomy and flexibility. There is also a need for 
the government to establish general guidelines and incentives 
and for its policy decisions to be more pragmatic, ad hoc, and 
goal-oriented. 

Traditionally, Brazil's technological community has 
restricted knowledge to a few sectors rather than used it for the 
benefit of the whole society. The Brazilian science and technol- 
ogy sector was subject to an extensive review in 1993. Accord- 
ing to the main conclusions and recommendations of the 
study, which was published in 1994 by the Getulio Vargas Foun- 
dation (Fundacao Getulio Vargas) , science and technology are 
more important than ever for Brazil. If the country is to raise 
living standards, consolidate a modern economy, and partici- 
pate as a significant partner in an increasingly integrated and 



441 



Brazil: A Country Study 

global world, the economy must modernize and adjust to an 
internationally competitive environment. Education should be 
expanded and improved at all levels. As the economy grows 
and new technologies are introduced, new challenges will 
emerge in the production and use of energy, environmental 
control, public health, the management of large cities, and 
changes in the composition of the labor force. Strong indige- 
nous competence will be necessary for Brazil to participate as 
an equal in international negotiations and in the setting of 
international standards that may have important economic and 
social consequences for Brazil. 

According to the study, any new science and technology pol- 
icy should stimulate the researcher's initiative and creativity; 
establish strong links between the researcher's work and the 
requirements of the economy, the educational system, and soci- 
ety as a whole; make Brazilian science and technology truly 
international; and strengthen the country's educational and 
science and technology capabilities. To fulfill these tasks, Bra- 
zil's technology policies need to be redirected in line with new 
economic realities. In the short run, policies need to be geared 
to the reorganization and technological modernization of the 
industrial sector. Permanent policies need to be established to 
induce the more dynamic sectors of the productive system to, 
as a main priority, enter a continuous process of innovation 
and incorporation of new technologies into the productive 
process and to keep in step with technical progress in the world 
economy. 

The study also concluded that research groups in universi- 
ties and government institutes should be strongly encouraged 
to link to the productive sector and to engage in applied work, 
while maintaining a high level of academic and basic research 
activities. The resources for applied work should not come 
from the budget for basic activities but from specific sources in 
government agencies, special programs, private firms, and 
independent foundations. Applied projects need to be evalu- 
ated in terms of their academic quality, as well as their eco- 
nomic viability and social and economic significance. 

Globalization requires a profound rethinking of the old 
debate between scientific self-sufficiency and internationalism, 
which are not necessarily contradictory. Brazil has much to 
gain as it increases its ability to participate fully as a respected 
partner in the international scientific and technological com- 
munity. To meet this objective, fellowship programs of the 



442 



A University of Sao Paulo geology professor operates equipment used for 

chemical analysis research. 
A technician uses an Autoscan electron microscope in the materials 
laboratory of the Electric Power Research Center, Rio de Janeiro. 
Courtesy Inter-American Development Bank, Washington 



443 



Brazil: A Country Study 

CAPES (Council for Advanced Professional Training) and of 
the CNPq for studies abroad need to be revised and expanded 
eventually. Brazil will benefit most fully from a studies-abroad 
program by awarding fellowships to first-rate students. Provi- 
sions also need to be made for postdoctoral programs both 
abroad and in Brazil and to bring top-quality scholars from 
other countries for extended periods, or even permanent 
appointments, in Brazilian university and research institutions. 

The channels for cooperation among Brazilians, interna- 
tional agencies and institutions, and the international scientific 
community need to be expanded. The World Bank, the Inter- 
American Development Bank, and the United Nations 
Development Programme (see Glossary) have played impor- 
tant roles in providing resources for capital investment, 
research support, or the development of Brazilian institutions. 
This support provides resources as well as international exper- 
tise and exposure. One possible future role for international 
agencies might be to stimulate the process of institutional 
reform. 

The issues of protectionism versus market competitiveness 
loom large in Brazil's relations with industrialized countries. In 
particular, scientific and technological developments demon- 
strate a need to emphasize pragmatism over ideology. Brazil's 
instruments of technological and industrial policy include tax 
incentives, tariff protection, patent legislation, government 
procurement, and long-term investments in technological 
projects in association with the private sector. All of these serve 
a useful purpose, but adequate patent and intellectual property 
protection remains key to the normalization of Brazil's rela- 
tions with the industrialized countries. 

New and systematic means to incorporate technology into 
the industrial process are needed to emphasize the develop- 
ment and dissemination of norms, standards, and procedures 
for technological transfer and quality improvement. Easy 
access of scientists to libraries and databases in the country and 
abroad can ensure a well-organized and properly funded infor- 
mation infrastructure, which makes use of the latest technolo- 
gies in electronic communication and networking. New 
technologies and competencies developed elsewhere have 
underscored the need to reevaluate the role of the CNPq's 
IBICT (Brazilian Institute of Scientific and Technological 
Information). 



444 



Science and Technology 



Nuclear Programs 

Brazil's nuclear capabilities are the most advanced in Latin 
America; only Argentina has provided serious competition. 
Brazil has one nuclear power plant in operation (Angra I) and 
two under construction (Angra II and III) . Its nuclear-enrich- 
ment program is multifaceted, with the military services 
involved in separate projects: the navy, centrifuge enrichment; 
the air force, laser enrichment; and the army, gas graphite 
enrichment. 

The history of Brazil's nuclear programs can be traced back 
to the early 1930s, with the initial research in nuclear fission. 
Much of that early research was conducted at the USP (Univer- 
sity of Sao Paulo), some by scientists who had been contracted 
from abroad. By the mid-1930s, Brazil had discovered vast 
deposits of uranium. In 1940 President Getulio Vargas signed 
an agreement with the United States for cooperative mining, 
including mining for uranium and monazite. During the 
1940s, Brazil signed three additional agreements with the 
United States. In exchange for monazite, the United States 
transferred nuclear technology. 

In the early 1950s, President Vargas encouraged the develop- 
ment of independent national nuclear capabilities. He offered 
to sell uranium or thorium to the United States in exchange 
for nuclear technology. Under Vargas Brazil sought to pur- 
chase three ultracentrifuge systems for uranium enrichment 
from West Germany. After Vargas's death, Acting President 
Joao Cafe Filho (1954-55) reversed the nationalistic nuclear 
policy and allowed the United States to control uranium 
research and extraction for two years. 

President Juscelino Kubitschek (1956-61), a pro-Vargas poli- 
tician, sought to develop indigenous nuclear capabilities by 
appointing a Congressional Investigating Committee (Comis- 
sao Parlamentar de Inquerito — CPI) to examine United States 
nuclear ties with Brazil. The CPI urged Brazil to adopt an inde- 
pendent nuclear posture. As a result, Kubitschek in 1956 cre- 
ated the IP EN (Institute for Energy and Nuclear Research). 
Kubitschek's successor, Janio Quadros (president, January- 
August 1961), continued the independent nuclear policy, 
which was based on natural uranium, as did his successor, Joao 
Goulart (president, 1961-64). 

As part of that independent nuclear policy, the CNEN 
(National Nuclear Energy Commission) was created formally 
on August 27, 1962. The CNEN is under the direct control of 



445 



Brazil: A Country Study 

the Strategic Affairs Secretariat (Secretaria de Assuntos 
Estrategicos — SAE) of the Brazilian presidency. According to 
the 1988 constitution, the CNEN is responsible for the orienta- 
tion, planning, supervision, and control of Brazil's nuclear pro- 
grams. 

The CNEN is located in Rio Janeiro, and is divided into 
three directorates: Directorate of Research and Development 
(Diretoria de Pesquisa e Desenvolvimento — DPD), Directorate 
of Radiation Protection and Nuclear Safety (Diretoria de 
Radioprotecao e Seguranca Nuclear — DRS), and Directorate 
of Logistical Support (Diretoria de Apoio Logfstico — DAL). 
The DPD is further subdivided into three scientific and techno- 
logical institutes: the IPEN, in Sao Paulo; the Center for Devel- 
opment of Nuclear Technology (Centro de Desenvolvimento 
de Tecnologia Nuclear — CDTN), which was created in 1952 in 
Belo Horizonte as Brazil's first nuclear research institute; and 
the Nuclear Engineering Institute (Instituto de Engenharia 
Nuclear — IEN), in Rio de Janeiro. The DRS is composed of the 
Radiation Protection and Dosimetry Institute (Instituto de 
Radioprotecao e Dosimetria — IRD), in Rio de Janeiro; the 
Licensing and Control Superintendency (Superintendencia de 
Licenciamento e Controle — SLC), with its major laboratory in 
Pocos de Caldas, Minas Gerais State; and various regional units. 

The most important of the CNEN's research institutes is the 
IPEN, a civilian agency that is associated with the SCTDE (Sao 
Paulo State's Secretariat for Science, Technology, and Eco- 
nomic Development), and linked to the USP (University of Sao 
Paulo) (the IPEN provides teaching and graduate education). 
The IPEN has a broad infrastructure of laboratories, a research 
reactor (IEA-R1), an industrial accelerator of electrons, and a 
compact cyclotron of variable energy. The IPEN is involved pri- 
marily in conducting research in the areas of nuclear materials 
and processes, nuclear reactors, applications of nuclear tech- 
niques, and nuclear safety. The IPEN is noted for its produc- 
tion of radioisotopes for nuclear medicine. 

Despite Brazil's search for autonomy in the nuclear sphere, 
it continued to receive technical assistance from the United 
States. In 1957 Brazil built the first of two nuclear research 
reactors in Sao Paulo, with United States support under the 
Atoms for Peace Program. That program had its origins in the 
Dwight D. Eisenhower administration (1953-61). Under the 
program, the United States agreed to share nuclear technology 
for peaceful purposes, but retained ultimate control over the 



446 



Science and Technology 



processes. A second reactor was developed in Belo Horizonte 
in 1960. In 1965 Brazil built its first indigenous research reac- 
tor in Rio de Janeiro. The United States supplied the medium- 
grade enriched uranium for the reactor. 

The construction of these reactors was controlled strictly by 
the United States. Brazil provided natural uranium to the 
United States and paid to have it processed. In turn the United 
States supplied Brazil with the enriched fuel required for its 
reactors. As envisioned by the Atoms for Peace Program, the 
United States retained control of the technology and by-prod- 
ucts created by Brazilian reactors. 

Based on the success of these research reactors, plans were 
made for a nuclear reactor to produce electricity. In 1968 the 
CNEN and Eletrobras were tasked with building a nuclear 
power plant at Angra dos Reis, Rio de Janeiro State. Three 
years later, the Westinghouse Electric Corporation agreed to 
supply the technology for the power plant, and construction of 
Angra I began. However, Brazilian authorities were dissatisfied 
with the Westinghouse accord, because it barred the transfer of 
United States nuclear technology to Brazil, made Brazil depen- 
dent on United States uranium for the reactor, and required 
that all Brazilian nuclear facilities be safeguarded by the Inter- 
national Atomic Energy Agency (IAEA). 

Brazil's military governments continued to assert autono- 
mous nuclear strategies. These regimes were frustrated by 
restrictions imposed by the United States on its nuclear pro- 
grams, concerned with Argentina's rapid nuclear development, 
and facing energy shortages (accentuated by the petroleum cri- 
sis of October 1973). A turning point was the inauguration of 
President Ernesto Geisel in March 1974. A former president of 
Petrobras, the petroleum monopoly, Geisel was concerned with 
the country's pressing energy needs. In December 1974, he cre- 
ated the Brazilian Nuclear Corporations (Empresas Nucleares 
Brasileiras S.A. — Nuclebras), a state company tasked with 
expanding the nuclear programs. 

Brazil was faced with a technical dilemma: it could switch to 
natural uranium technology, which could be pursued indepen- 
dently; or it could continue to pursue the more costly and 
advanced enriched uranium technology, but with external 
assistance. Brazilian policy makers opted for the latter, but 
given that the United States had been an unreliable supplier, 
Brazil was forced to look elsewhere for assistance. 



447 



Brazil: A Country Study 

Brazil made a radical change in 1975, when it opted for 
nuclear technology from West Germany, despite strong pro- 
tests from the United States. The agreement, signed on June 
27, called for West Germany to transfer eight nuclear reactors 
(each of which could produce 1,300 megawatts), a commercial- 
scale uranium enrichment facility, a pilot-scale plutonium 
reprocessing plant, and Becker "jet nozzle" enrichment tech- 
nology. West Germany's Kraftwerk Union, an affiliate of Sie- 
mens, was hired to construct the power plants. The projected 
cost of the program was US$4 billion, to be paid over a fifteen- 
year period. The most important element of the agreement was 
that it called for the first-ever transfer of technology for a com- 
plete nuclear fuel cycle, including enrichment and reprocess- 
ing. The United States government opposed the accord 
vigorously. Although it was unable to revoke the agreement, 
the United States convinced West Germany to enact stringent 
safeguards. 

Many experts have questioned the cost-effectiveness of Bra- 
zil's nuclear power plants. The Angra I power plant cost US$2 
billion to build, and it began to operate commercially in 1983. 
When Angra I is in full operation, it produces 20 percent of the 
electricity used in the city of Rio de Janeiro. From 1985 
through 1993, however, Angra I was turned off more than 
thirty times because of technical problems and legal chal- 
lenges, earning it the nickname "firefly." Furnas Electric Power 
Plants, Inc. (Furnas Centrais Eletricas S.A. — Furnas), the state 
company that administers Angra 1, ldst US$100 million in 
operating costs in 1993 alone because the plant was closed 
down most of the year. The plant is expected to be torn down 
in 2009, at a cost of US$200 million. 

Angra II, under construction since 1977, was projected to be 
ready by 1993, but in early 1996 its completion date was still 
uncertain. The construction of Angra II had cost at least 
US$4.6 billion through 1993, and it was estimated that at least 
an additional US$1.5 billion would be necessary to complete 
the project. Various experts projected that the total cost of the 
plant construction would exceed US$10 billion. Still in its early 
phases of construction, Angra III cost US$1 billion through 
1993. On October 18, 1994, President Itamar Franco (1992- 
94) requested that US$400 million in funding that had been 
allocated to Angra III be transferred to Angra II. Given the 
severe budget constraints, the construction of Angra III and 
additional power plants appear doubtful. 



448 



Science and Technology 



West Germany did not require IAEA safeguards, and follow- 
ing the 1975 agreement Brazil transferred technology from its 
power plant projects to a secret program to develop an atom 
bomb. Code-named "Solimoes," after a river in the Amazon, 
the secret program was started in 1975 and eventually came to 
be known publicly as the Parallel Program. In 1987 Jose Sarney 
(president, 1985-90) announced that Brazil had enriched ura- 
nium successfully on a laboratory scale to 20 percent. At that 
time, some observers predicted that Brazil would have a 
nuclear-weapons capability by the turn of the century. Presi- 
dent Fernando Collor de Mello took bold steps to control and 
restrict Brazil's nuclear programs. In September 1990, he sym- 
bolically closed a test site at Gachimbo, in Para State. That 
October, he formally exposed the military's secret plan to 
develop an atom bomb. 

Within Brazil's Congress, a CPI looked into the Parallel Pro- 
gram. Members visited numerous facilities, including the Insti- 
tute of Advanced Studies (Instituto de Estudos Avancados — 
IEAv) at the Aerospace Technical Center (Centro Tecnico 
Aeroespacial — CTA) in Sao Jose dos Campos. They also inter- 
viewed key players in the nuclear program, such as Joao 
Figueiredo (president, 1979-85) and retired Army General 
Danilo Venturini, the former head of the National Security 
Council (Conselho de Seguranca Nacional — CSN) under 
Figueiredo. The CPI investigation exposed secret bank 
accounts, code-named "Delta," which were managed by the 
CNEN and used for funding the program. The most disturbing 
revelation in the CPI report was that the IEAv had designed two 
atomic bomb devices, one weighing twenty to thirty kilotons 
and a second weighing twelve kilotons. It was also revealed that 
Brazil's military regime secretly exported eight tons of uranium 
to Iraq in 1981. 

Through a series of agreements, Brazil and Argentina have 
defused the issue of nuclear rivalry. On May 20, 1980, while 
under military rule, both countries signed the Brazilian-Argen- 
tine Agreement on the Peaceful Use of Nuclear Energy, estab- 
lishing technical cooperation in developing the nuclear fuel 
cycle and coordination of nuclear policy. President Sarney and 
Argentine president Raul Alfonsfn strengthened this coopera- 
tion in 1985, with the Joint Declarations on Nuclear Policy of 
Foz do Iguacu. After the 1985 agreement, the presidents and 
technical staffs made reciprocal visits to nonsafeguarded 
nuclear installations in both countries. The heads of state 



449 



Brazil: A Country Study 

made subsequent joint declarations in Brasilia (1986); Viedma, 
Argentina (1987); Ipero, Brazil (1988); and Buenos Aires 
(1990). 

On November 28, 1990, Presidents Collor de Mello and Car- 
los Saul Menem of Argentina signed the second Foz do Iguacu 
declaration (Argentine-Brazilian Declaration on Common 
Nuclear Policy of Foz do Iguacu), in which both governments 
pledged their commitment to an exclusively peaceful use of 
nuclear energy and established a Common System for Account- 
ing and Control of Nuclear Materials (Sistema Comum de 
Contabilidade e Controle de Materials Nucleares — SCCCMN) . 
On July 18, 1991, Presidents Collor de Mello and Menem 
agreed to establish the Agreement on the Exclusively Peaceful 
Use of Nuclear Energy, which created the Brazilian-Argentine 
Agency for Accounting and Control of Nuclear Materials 
(Agenda Brasileiro-Argentina de Contabilidade e Controle de 
Materials Nucleares — ABACC). That agreement entered into 
force on December 12, 1991, after ratification by the legisla- 
tures in both countries. With headquarters in Rio de Janeiro, 
the ABACC provides on-site inspections of nuclear facilities in 
Argentina and Brazil and maintains an inventory of nuclear 
material in each country. 

The most important nuclear accord between Brazil and 
Argentina was signed on December 13, 1991, in a meeting 
attended by Presidents Collor de Mello and Menem at the 
headquarters of the IAEA in Vienna. The accord is referred to 
as the quadripartite agreement, because it was signed by Brazil, 
Argentina, the IAEA, and the ABACC. The agreement allows 
for full-scope IAEA safeguards of Argentine and Brazilian 
nuclear installations. It also allows the two countries to retain 
full rights over any "technological secrets" and to develop 
nuclear energy for the propulsion of submarines. Brazil's Sen- 
ate ratified the agreement on February 9, 1994, but only after 
considerable pressure by Brazil's Ministry of Foreign Affairs 
(Itamaraty). 

On May 30, 1994, Brazil ratified the Treaty of Tlatelolco (see 
Glossary), following the lead of Argentina and Chile, which 
had ratified it on January 18, 1994. In Brazil there was an active 
lobby against the quadripartite agreement and the Treaty of 
Tlatelolco. Indeed, it took Brazil considerably longer than 
Argentina to approve those pacts. Brazilian diplomats have 
argued that the Non-Proliferation Treaty (NPT) is discrimina- 
tory because it excludes capabilities of those already in the 



450 



Science and Technology 



club. Furthermore, some Brazilians have argued that the NPT 
is an infringement on sovereignty and that the current agree- 
ments are sufficient and even stronger than the NPT. Neverthe- 
less, Brazil finally agreed in 1997 to ratify the NPT. 

Some observers have argued that Brazil is still seeking the 
technological capability to produce a nuclear bomb, despite 
the 1991 quadripartite agreement, the full ratification of the 
Treaty of Tlatelolco, and a provision in Brazil's 1988 constitu- 
tion that bars the development of nuclear energy for anything 
but peaceful purposes. They note that Brazil's nuclear program 
is under the primary control of the military, which resents 
IAEA inspections. Brazil's Senate required a "supplementary 
adjustment" to the treaty that protects "industrial secrets," pos- 
sibly the nation's Aramar centrifuge enrichment facilities, from 
on-site inspections. The Aramar Experimental Center was inau- 
gurated in 1988 and is the only uranium enrichment plant in 
Brazil. It is located in the interior of Sao Paulo, in the town of 
Ipero. A further amendment was added that bans IAEA inspec- 
tions outside the normal schedule. Finally, Brazil was allowed 
to provide an accounting of the uranium that has already been 
enriched, but the IAEA and ABACC have no way to verify that 
amount. The dual nature of nuclear energy allows it to be used 
for both peaceful and military purposes. The military applica- 
tion of Brazil's nuclear programs, therefore, depends less on 
technological considerations than on political will. 

Most observers, however, are more optimistic about Brazil's 
nuclear intentions. Argentine diplomat and nuclear expert 
Julio Cesar Carasales has argued that Brazil's nuclear programs 
need to be understood in the context of Brazil's rapproche- 
ment with Argentina. In that context, he concluded that, 
"Extraordinary accomplishments already have been achieved 
and have been generally welcomed; there is no danger that the 
process will be reversed or undermined; the time has come to 
consolidate the bilateral arrangements; the nuclear control 
agency, the ABACC, is performing in a satisfactory matter; new 
substantial agreements are not to be expected; and some policy 
divergence is possible, as in the case of the NPT, although there 
are reasons to predict that in the long run Brazil will join that 
treaty." Indeed, in 1997 Brazil announced its adherence to the 
NPT. 

Brazil's nuclear programs have experienced severe financial 
constraints since 1990, when Collor de Mello was president. 
The Aramar Experimental Center dismissed 700 of its 1,600 



451 



Brazil: A Country Study 

employees between August 1994 and March 1995. The comple- 
tion date for the navy's nuclear-powered submarine was post- 
poned several times, from 1995 to 2010. Until 1995 that project 
had cost an estimated US$1 billion. The submarine program, 
rarely scrutinized in the past, was the subject of scathing criti- 
cism by Veja, the leading weekly news magazine, in December 
1994. The magazine raised allegations of corruption and 
exposed technical difficulties with the program. 

Despite such financial and technical hurdles, it is likely that 
Brazil will continue to fund efforts to develop more autono- 
mous nuclear programs. Indeed, the administration of 
Fernando Henrique Cardoso (president, 1995- ) in mid-1995 
placed a high priority on completing the Angra II nuclear 
power plant. Such programs will be pursued in a more open 
environment, given the many bilateral and multilateral nuclear 
accords signed by Brazil. 

The Space Program 

Brazil has the most advanced space program in Latin Amer- 
ica, with significant capabilities in launch vehicles, launch sites, 
and satellite manufacturing. In an attempt to build a Satellite 
Launch Vehicle (Vefculo Lancador de Satelite — VLS), Brazil 
has since 1964 developed a series of sounding (research) rock- 
ets, named Sonda I, II, III, and IV. The early Sondas were test- 
launched from Barreira do Inferno (literally, "Barrier of Hell") 
Launch Center (Centro de Lancamento da Barreira do 
Inferno), near the city of Natal in the Northeast (Nordeste). 
The Sonda IV rocket was tested successfully on April 28, 1989. 
Subsequent launches were made from the Alcantara Launch- 
ing Center (Centro de Lancamento de Alcantara — CLA), in 
Maranhao, President Sarney's home state. The CLA, officially 
dedicated on February 21, 1990, cost more than US$470 mil- 
lion to develop. It is the closest launch center to the equator in 
the world (2.3 degrees south of the equator), making it attrac- 
tive for launches of geostationary satellites. For example, 
because it is so close to the equator it provides a 25 percent fuel 
savings compared with Cape Kennedy. 

On February 9, 1993, the first satellite developed entirely in 
Brazil, the Data-Collecting Satellite (Satelite de Coleta de 
Dados — SCD-1), was launched from a United States B-52 
plane carrying a Pegasus rocket made by the American Orbital 
Science Corporation. The SCD-1, sometimes referred to as the 
"green" satellite, is used by INPE agencies, such as the Weather 



452 



An Ansat-10 satellite earth station, ten-meter antenna of Avibrds 
Aerospace Industry, Inc. (Avibrds Industria Aeroespacial S. A. — 

Avibrds) 
Courtesy Avibrds 

Forecasting and Climate Studies Center (Centro de Previsao 
do Tempo e Estudos Climaticos — CPTEC), for collecting mete- 
orological and environmental data on the Amazon region, 
including the levels of carbon monoxide and carbon dioxide in 
the atmosphere. The data are transmitted to the INPE 
(National Institute of Space Research) and are used for moni- 
toring forest fires. More than thirty companies were involved in 
the construction of the SCD-1, with the INPE providing most 
of the electronic hardware equipment. The SCD-2, which was 
scheduled to be launched by a Brazilian-made rocket, will also 
be used to collect environmental data. Brazil is also developing 
the Remote Sensing Satellite (Satelite de Sensoriamento 
Remoto— SSR-1). 



453 



Brazil: A Country Study 

On July 6, 1988, Brazil signed an agreement with China that 
calls for the joint development (between the INPE and the Chi- 
nese Space Agency) of two earth-imaging satellites to be 
launched by a Long March Chinese rocket from the Shanxi 
Launching site. Known as the China-Brazil Earth Resources 
Satellite (Satelite Sino-Brasileiro de Recursos Terrestres — 
CBERS), the high-resolution CBERS will collect data from the 
entire planet and will be used for agriculture, geology, hydrol- 
ogy, and the environment. The Sino-Brazilian agreement was 
inactive from 1988 through 1991 because of Brazil's lack of 
funds. In October 1991 and November 1994, Brazil and China 
signed additional agreements for the construction of the satel- 
lites, worth US$150 million. The CBERS-1 was scheduled to be 
launched in May 1997. 

The Brazilian Telecommunications Company (Empresa 
Brasileira de Telecomunicacoes — Embratel), a state-controlled 
agency in charge of the Brazilian Satellite Communication Sys- 
tem (Sistema Brasileiro de Comunicacao por Satellites — SBTS), 
owns and operates a series of satellites that are positioned in 
geostationary orbit over the equator. Arianespace, a French 
space and defense partner of France's Aerospatiale group, 
launched the first two Brasilsat satellites in February 1985 and 
March 1986. 

Until 1994 the military directed most of the space program 
through the Ministry of Aeronautics, which is in charge of the 
CTA. Created in 1950, the CTA is involved in research and 
development for the aerospace programs of the FAB (Brazilian 
Air Force). In 1965 the FAB created the Space Activities Center 
(Instituto de Atividades Espaciais — IAE), one of several insti- 
tutes within the CTA, to develop rockets. Since its creation, the 
IAE has tested more than 2,000 rockets. 

In 1971 a joint civilian-military committee, the Brazilian 
Commission for Space Activities (Comissao Brasileira de Ativi- 
dades Espaciais — Cobae), was established and placed under 
the CSN (National Security Council) . Cobae was chaired by the 
head of the Armed Forces General Staff (Estado-Maior das 
Forcas Armadas — EMFA) and was in charge of the Complete 
Brazilian Space Mission (Missao Espacial Completa 
Brasileira— MECB). The MECB was created in 1981 to coordi- 
nate launch vehicles, launch sites, and the manufacturing of 
satellites. 

On the civilian side, the MECB is headed by the INPE. Estab- 
lished in 1971, the INPE replaced the National Commission for 



454 



A Brazilian Air Force AMX tactical fighter made by Embraer 
Courtesy Brazilian Embassy, Washington 

Space Activities (Comissao Nacional de Atividades Espaciais — 
CNAE). The INPE is subordinate to the Ministry of Science 
and Technology and roughly the CTA's counterpart. The INPE 
develops satellites and conducts space and meteorological 
research. It has also been developing engines using liquid pro- 
pellants since 1988, but with mixed results. 

Within Brazil's MECB, civilians have been primarily responsi- 
ble for satellite production, and the armed forces have been in 
charge of developing launch pads and rockets. Despite this 
division of labor, the armed forces were the dominant actors in 
the MECB, at least through 1993. Military officers occupied 
most of the high-ranking positions in the MECB. 

In an attempt to place the MECB more firmly in the hands 
of civilians, Brazil's President Itamar Franco signed a bill on 
February 10, 1994, creating the Brazilian Space Agency (Agen- 
da Espacial Brasileira — AEB). The AEB replaced Cobae, which 
acted merely as an advisory body and had no staff. The AEB, a 
semi-autonomous agency, has its own staff and responsibilities 
for policy implementation. It is led by a civilian, who is under 
the direct control of the president. The AEB oversees the 
MECB, but the Ministry of Aeronautics is still in charge of 
launch facilities and launch vehicles, and the INPE continues 
to direct the development of satellites. It remains to be seen, 



455 



Brazil: A Country Study 

therefore, whether the AEB can effectively oversee the various 
ministries involved in the MECB. 

The AEB was created in part to deflect criticism from the 
United States government, which viewed with alarm the 
involvement of Brazil's military in the MECB. The United 
States played a central role in the development of Brazil's 
MECB, beginning with its financial and technological support 
for the CTA and the INPE. In 1966 the United States supplied 
sounding rockets, which were launched subsequently by Brazil. 
Based on that technology, Brazil later developed larger boost- 
ers of its own. 

The ties between Brazil and the United States were generally 
along functional lines within the two governments. The United 
States National Aeronautics and Space Administration (NASA) 
worked with the INPE, sharing data, helping to develop and 
implement scientific experiments, and training the institute's 
technicians and scientists. Likewise, the United States Air Force 
worked with Brazil's Ministry of Aeronautics and established a 
number of data-exchange agreements with the CTA that cov- 
ered such matters as weather forecasting. 

Brazil no longer relies as heavily on the United States for 
space technology. In 1981 it unveiled the MECB, an ambitious 
US$1 billion program with the aim of attaining self-sufficiency 
in space technology. At that time, Brazil committed itself to 
launching a series of four Brazilian-made satellites (two for 
weather forecasting and two for terrain photography) from 
Alcantara. 

In further moves away from dependence on the United 
States, in the 1980s Brazil took steps to become self-sufficient in 
the production of ammonium perchlorate, an oxidizer for 
solid fuels. In addition to its indigenous research and develop- 
ment, Brazil now cooperates in its space program with Canada, 
the European Space Agency (ESA), Russia, France, and espe- 
cially China. One joint satellite project with China is the China- 
Brazil Earth Resources Satellite. Brazil is also seeking space 
cooperation with new partners, such as Israel. 

In the mid-1980s through the early 1990s, many United 
States policy makers were concerned with Brazil's MECB 
because of the possibility of diverting space-launch technology 
to a ballistic missile program. Although by mid-1997 Brazil had 
not produced a ballistic missile, its military had given high pri- 
ority to the development of several missile systems, including 
the Piranha missile (MAA-1). Brazil's space-launch program, 



456 



The Avibrds-made Astros II artillery saturation rocket system fires an 

SS-60 rocket. 
Courtesy Avibrds 

coupled with its artillery rocket technology, suggests that the 
country has the potential to develop advanced missiles, includ- 
ing ballistic missiles. 

From 1987 to 1994, the United States sought to stifle the 
development of Brazil's ballistic missile program through the 
Missile Technology Control Regime (MTCR — see Glossary), 
formed on April 16, 1987. Given Brazil's advanced nuclear pro- 
gram, the United States was especially concerned that a poten- 
tial Brazilian ballistic missile could eventually serve as a vehicle 
for a nuclear warhead. The United States restrictions on space 
technology to Brazil stalled Brazil's VLS (Satellite Launch Vehi- 
cle) program and ballistic missile research and development, 
strained United States security relations with Brazil, and 
prompted Brazil to explore closer ties with China, Russia, and 



457 



Brazil: A Country Study 

various countries in Europe and the Middle East (especially 
Iraq). In October 1995, for example, Brazil offered Russia the 
use of its Alcantara base, to launch rockets. 

On February 11, 1994, Brazil announced that it would com- 
ply with MTCR guidelines. Such compliance would include 
export controls on Brazilian space and missile goods and tech- 
nology. Brazil's accession to the MTCR coincided with various 
attempts by the United States to cooperate in space activities 
and seemed to signal a new era in space relations. Brazil's appli- 
cation for MTCR membership was accepted in October 1995. 
Thus, by the end of 1995 Brazil's space capabilities were 
improving, although they were modest by the standards of 
countries such as the United States and Russia. 

Missile Programs 

The potential military applications of Brazil's MECB center 
around the Sonda IV and its VLS, which could be used for a 
ballistic missile. Sonda IV has a range of 600 kilometers and 
can carry a 500-kilogram payload, and is therefore subject to 
MTCR restrictions. The transformation of the Sonda IV into an 
intercontinental ballistic missile (ICBM) would require several 
more successful launches and a major technological leap, espe- 
cially in payload shielding and guidance. 

Many of the factors that drove Brazil's nuclear programs also 
have driven the space and missile programs. In the mid-1980s, 
Brazil was concerned with Argentina's Condor II ballistic mis- 
sile program, which received substantial technological assis- 
tance from Europe and funding from Iraq. In the late 1980s 
and early 1990s, however, Argentina dismantled its Condor 
missile program and removed that rationale for Brazil's MECB. 
Brazil's quest for advanced technology drives much of the 
space and ballistic missile programs. For example, Brazilian 
authorities considered the April 1990 purchase of follow-on sat- 
ellites for the Brazilian Satellite (Brasilsat) program an oppor- 
tunity to receive valuable technology. The Brazilian 
government specifically required that the transfer of satellite 
technology be a precondition for the purchase of the satellites. 
In sum, an attempt by Brazil to produce a ballistic missile is 
driven primarily by a search for technological autonomy, 
although political, security, and economic motives are also 
important. 

The government of Brazil has stated that it supports the 
peaceful applications of space technology and denies any 



458 



Science and Technology 



intention of developing a ballistic missile. It argues that the 
Sonda IV is only a satellite launcher and lacks the required 
accuracy for military use. At least one missile expert, Steven M. 
Flank, has argued that if Brazil had intended to develop a bal- 
listic missile it would not have chosen the Sonda technological 
path. He notes, for example, that the VLS employed in the 
Sondas are solid-propellant systems, which are not as effective 
as liquid-propellants for launching ballistic missiles. 

The armed forces have even greater control over missile pro- 
duction than they do over the MECB. Following a meeting in 
June 1986 among six companies, the Armed Forces General 
Staff (EMFA), and the three military ministries, missile produc- 
tion was placed under the authority of the Armed Forces Joint 
Command (Comando Geral das Forcas Armadas — CMFA). All 
missile manufacturers are required to submit programs to the 
CMFA, which evaluates them and awards contracts. 

The most important Brazilian company involved in incipient 
missile technology is Avibras Aerospace Industry, Inc. (Avibras 
Industria Aeroespacial S.A. — Avibras). The Astros II, a multiple 
rocket launcher, is the most profitable weapon produced by 
Avibras. It can launch rockets of different caliber: SS-30 rock- 
ets up to thirty kilometers; SS-40 rockets, forty kilometers; and 
SS-60 rockets, sixty kilometers. In the 1980s, Avibras sold an 
estimated sixty-six Astros II artillery systems to Iraq and an 
unspecified number to Saudi Arabia, Bahrain, and Qatar. Total 
sales of the Astros II between 1982 and 1987 reached US$1 bil- 
lion. 

In the late 1980s, Avibras was involved in the development of 
the SS-150 (based on the Astros-II), the SS-300, and the SS- 
1000 (based largely on the Sonda rockets). All Avibras pro- 
grams were "put on hold" in January 1990, when the company 
filed for bankruptcy. Its employee roster had fallen from 6,000 
to 900, and the company had US$90 million worth of unsold 
rockets. Although Avibras improved its financial health in the 
early 1990s, by the end of 1995 the SS-150 and the SS-300 had 
not passed the initial stages of development, and the SS-1000 
had not even been designed. 

In the mid-1980s, the armed forces became frustrated by 
delays in the development of self-guided missiles. Following the 
June 1986 meeting between private industry and the military, a 
consensus was reached that standardization in missile produc- 
tion was necessary. As a result, a new firm, Orbital Aerospace 
Systems, Inc. (Orbita Sistemas Aerospaciais S.A.), was created 



459 



Brazil: A Country Study 

in February 1987 to coordinate Brazil's missile program. Orbita 
was tasked with developing guided missiles, rockets, and satel- 
lite launchers for civilian applications. Orbita, however, col- 
lapsed in the early 1990s because of inadequate funding, 
technological constraints, and restrictions placed by the United 
States and other MTCR signatories on the transfer of sensitive 
technology to Brazil. 

By mid-1997, therefore, Brazil could be placed in a fourth 
tier of ballistic missile producers. The first tier includes the 
United States and Russia, which have ICBMs. The second com- 
prises nations such as France, China, Britain, and Israel, which 
have ballistic missiles of more limited range and accuracy. A 
third group includes developing countries, such as Iraq, India, 
and South Africa, which have advanced missile programs with 
modest ranges. A fourth category includes countries such as 
Argentina, Brazil, Egypt, Pakistan, and South Korea, which 
have artillery rockets and embryonic ballistic missile capabili- 
ties. Brazil's capabilities clearly pale in comparison with those 
of the first two tiers and are even modest when compared with 
those in the third tier. Nonetheless, its programs indicate that it 
aspires to a third- and perhaps a second-tier status. Finally, it 
should be noted that Brazil's space and missile capabilities are 
sophisticated in relation to those of most developing nations. 
In summary, Brazil's ballistic missile program, which faces for- 
midable constraints, is largely in the preplanning stages and 
not engaged in serious research and development. 

* * * 

The main source of information about Brazilian science is 
Fernando de Azevedo's As ciencias no Brasil, a collection of 
essays written by leading Brazilian scientists in the early 1950s. 
Simon Schwartzman's A Space for Science: The Development of the 
Scientific Community in Brazil is a sociological interpretation of 
the institutionalization of scientific and technological activities 
in the country. It is based on extensive interviews with leading 
scientists and a review of written sources. Science and Technology 
in Brazil by Schwartzman et al discusses the need for a strategic 
role by science and technology in Brazil. 

A few key institutions have been the subject of detailed stud- 
ies that have illuminated the social, economic, and political cli- 
mate of the times. Noteworthy are those on the Ouro Preto 
School of Mines (Escola de Minas de Ouro Preto) in the nine- 



460 



Science and Technology 



teenth century and on the Oswaldo Cruz Foundation in the 
early twentieth century. Most institutional histories, however, 
are just laudatory tales of names and achievements and have lit- 
tle analytical content. Works on the Brazilian Association for 
the Progress of Sciences appeared in 1987 and 1990 by Ana 
Maria Fernandes and Antonio Jose Botelho, respectively. The 
association's journals, Ciencia e Cultura and Ciencia Hoje, are 
important repositories of historical and contemporary infor- 
mation. 

The ambitious project of technological development since 
the 1970s has generated several analytical and comparative 
studies from economic and political perspectives. Emanuel 
Alder has compared the computer and nuclear policies in Bra- 
zil with those in Argentina, linking their different results with 
the ideologies and social groups behind these policies. For the 
broad policies, see the writings of Fabio Stefano Erber; for the 
computer industry, see Paulo Bastos Tigre. The main source 
for publications on the economic dimensions of scientific and 
technological policies in Brazil is the Applied Economic 
Research Institute (Instituto de Pesquisa Economica Apli- 
cada — IPEA), an agency of Brazil's Ministry of Planning. The 
ministry also publishes Revista de Pesquisa e Planejamento 
Econdmico. The Brazilian Science and Technology Policy 
Project, conducted by the Getulio Vargas Foundation in Sao 
Paulo in 1993, has published about forty studies on different 
aspects of Brazilian science and technology through the Edi- 
tora da Fundacao Getulio Vargas in Rio de Janeiro. 

A series of working papers resulted from three science and 
technology policy studies carried out in Brazil in 1993 and 
1994, with the support of the Ministry of Science and Technol- 
ogy, the World Bank, the Inter-American Development Bank, 
and the UNDP (United Nations Development Programme). 
One of the studies was carried out at the University of Campi- 
nas under the coordination of Luciano G. Coutinho. It focused 
on the conditions and possibilities for strengthening Brazil's 
industrial competitiveness. A second study under the coordina- 
tion of Francisco Biato was a joint project of the Ministry of Sci- 
ence and Technology, the Brazilian Academy of Sciences, and 
the UNDP. The third science and technology study was con- 
ducted at the Getulio Vargas Foundation under the coordina- 
tion of Simon Schwartzman, with the support of the Ministry of 
Science and Technology and the World Bank. The program of 
science and technology at the University of Sao Paulo has pub- 



461 



Brazil: A Country Study 

lished a series of books on the management of science and 
technology research units and related subjects, with a special 
emphasis on the private sector. 

Brazil's nuclear programs have received considerable aca- 
demic and journalistic attention. The most insightful analysis is 
provided by Etel Solingen in her various journal articles and in 
her book, Industrial Policy, Technology, and International Bargain- 
ing: Designing Nuclear Industries in Argentina and Brazil. Some of 
the most vociferous critics of Brazil's nuclear development are 
Brazilians themselves. Luiz Pinguelli Rosa, a nuclear scientist 
who was a major opponent of the Brazilian-German nuclear 
accord, criticizes the role of Brazil's military in nuclear devel- 
opment in A politica nuclear e o caminho das armas atomicas. Fre- 
derico Fullgraf provides critical and historical analysis in A 
bomba pacifica: Brasil e a corrida nuclear. Tania Malheiros, a 
journalist, offers a provocative account of Brazil's nuclear pro- 
gram in Brazil, a bomba oculta: programa nuclear brasileiro. 

Brazil's space program has received much less attention than 
its nuclear programs. Steven M. Flank provides an excellent 
comparative analysis in his Ph.D. dissertation "Reconstructing 
Rockets: The Politics of Developing Military Technology in 
Brazil, India, and Israel." Brian G. Chow examines the difficul- 
ties in attaining space-launching capabilities in An Evolutionary 
Approach to Space Launch Commercialization. Pericles Gasparini 
Alves assesses Brazil's space program in "Access to Outer Space 
Technologies: Implications for International Security." (For 
further information and complete citations, see Bibliography.) 



462 



Appendix 



Table 

1 Metric Conversion Coefficients and Factors 

2 Extent of Brazil's Borderline Shared by Neighboring 

Countries and the Atlantic Ocean 

3 Territory by Region and State, 1996 

4 Real Rate of Growth of Gross Domestic Product (GDP) and 

of Agriculture, Industry, and Services Sectors, 1950-96 

5 Principal Components of the Current Account, 1970-96 

6 Nominal and Real Interest Rates in International Markets, 

1970-96 

7 Index of Real Gross Domestic Product, 1950-96 

8 Index of Average Real Minimum Wage, 1960-96 

9 Major Permanent Crops: Area Harvested, Production, Mean 

Productivity, Production Value, and Major Producing 
States, 1993 

10 Major Temporary Crops: Area Harvested, Production, Mean 

Productivity, Production Value, and Major Producing 
States, 1993 

1 1 Number of Livestock and Poultry by Region, 1992 

12 Monetary Units, 1942-94 

13 Principal Components of the Balance of Payments, 1981-96 

14 Public-Sector National Income Accounts, 1970-90 

15 Annual Inflation Rate, 1964-96 

16 Nominal Tariff Rate Average by Sector, Selected Years, 

1980-94 

17 Foreign Trade by Major Product, Selected Years, 1978-96 

18 Party Members in the National Congress, Selected Years, 

1987-97 

19 Election Results for the National Congress and for Gover- 

nors, November 1982, and Composition of Electoral 
College, January 1985, by Party 

20 Direct Elections for Governor by State and Party, 1982, 1986, 

1990, and 1994: Winning Parties 

21 Municipal Elections in the 100 Largest Cities, 1988, 1992, 

and 1996 

22 Presidential Election, November 15, 1989: First-Round 



463 



Brazil: A Country Study 
Results 

23 Presidential Election, December 17, 1989, by Size of 

Municipal Electorate: Second-Round Results 

24 Composition of the Federal Senate, Chamber of Deputies, 

and State Assemblies by Party, 1991 and 1995 

25 Presidential Election, October 3, 1994: First-Round Results 

26 Party Blocs in the National Congress, 1995 

27 Regional Strength of Parties by Blocs in the Chamber of 

Deputies, 1995 

28 Military Expenditures (ME), Armed Forces (AF), Gross 

National Product (GNP), Central Government Expen- 
ditures (CGE), and Population, 1984-94 

29 Major Army Equipment, 1997 

30 Major Naval Equipment, 1997 

31 Major Air Force Equipment, 1997 

32 Number of Fellowships Granted by the National Council for 

Scientific and Technological Development, 1995 

33 Signed Contracts of the Funding Authority for Studies and 

Projects, 1996 

34 Fellowships of the Council for Advanced Professional 

Training Granted in 1991 and 1995 

35 Budget of the National Council for Scientific and Techno- 

logical Development by Main Line of Activity, 1980-95 

36 Expenditures for Science and Technology in the State of Sao 

Paulo, 1996 

37 Education Obtained by the Higher Education Professorate, 

1983 



464 



Appendix 



Table 1. Metric Conversion Coefficients and Factors 

When you know Multiply by To find 



Millimeters 


0.04 


inches 


Centimeters 


0.39 


inches 


Meters 


3.3 


feet 


Kilometers 


0.62 


miles 


Hectares 


2.47 


acres 


Square kilometers 


0.39 


square miles 




35.3 


cubic feet 


Liters 


0.26 


gallons 


Kilograms 


2.2 


pounds 


Metric tons 


0.98 


long tons 




1.1 


short tons 




2,204 


pounds 


Degrees Celsius (Centigrade) 


1.8 


degrees Fahrenheit 



and add 32 



Table 2. Extent of Brazil's Borderline Shared by Neighboring Countries 
and the Atlantic Ocean 



Extent of Border 



Neighboring Countries and Atlantic Ocean 


In Kilometers 


As Percentage of Total 


Neighboring countries 








1,263 


5.5 


Bolivia 


3,126 


13.5 




1,644 


7.1 




655 


2.8 




1,606 


7.0 




1,339 


5.8 


Peru 


2,995 


13.0 




593 


2.6 




1,003 


4.3 


Venezuela 


1,495 


6.5 


Total neighboring countries 


15,719 


68.0 


Atlantic Ocean 


7,367 


31.9 


TOTAL 1 


23,086 


100.0 



Figures may not add to totals because of rounding. 



Source: Based on information from the World Wide Web home page of the Fundacao 
Instituto Brasileiro de Geografia e Estatistica (http://www.ibge.gov.br), Dire- 
toria de Geociencias, Departamento de Cartografia, Rio de Janeiro, 1996. 



465 



Brazil: A Country Study 



Table 3. Territory by Region and State, 1996 

Area in Square As Percentage 

Region and State T/ ., ^ 

6 Kilometers 



Center-West 

Federal District 5,822 - 1 0.4 

Goias 341,290 4.0 21.2 

Mato Grosso 906,807 10.6 56.3 

Mato Grosso do Sul 358,159 4.2 22.2 

Total Center-West 2 1,612,077 18.9 100.0 

North 

Acre 153,150 1.8 4.0 

Amapa 143,454 1.7 3.7 

Amazonas 1,577,820 18.5 40.8 

Para 1,253,165 14.7 32.4 

Rondonia 238,513 2.8 6.2 

Roraima 225,116 2.6 5.8 

Tocantins 278,421 3.3 7.2 

Total North 2 3,869,638 45.3 100.0 

Northeast 

Alagoas 27,933 0.3 1.8 

Bahia 567,295 6.6 36.3 

Ceara 146,348 1.7 9.4 

Ceara-Piaui 3 2,977 - 0.2 

Maranhao 333,366 3.9 21.4 

Paraiba 56,585 0.7 3.6 

Pernambuco 4 98,938 1.2 6.3 

Piaui 252,379 3.0 16.2 

Rio Grande do Norte 53,307 0.6 3.4 

Sergipe 22,050 0.3 1.4 

Total Northeast 2 1,561,178 18.3 100.0 

South 

Parana 199,709 2.3 34.6 

Rio Grande do Sul 282,062 3.3 48.9 

Santa Catarina 95,443 1.1 16.5 

Total South 2 577,214 6.8 100.0 

Southeast 

Espirito Santo 46,184 0.5 5.0 

MinasGerais 588,384 6.9 63.5 

Rio de Janeiro 43,910 0.5 4.7 



466 



Appendix 



Table 3. (Continued) Territory by Region and State, 1996 



Region and State 


Area in Square 
Kilometers 


As Percentage 
of Brazil of Region 




248,809 


2.9 


26.8 




927,286 


10.9 


100.0 


Trindade and Martin Vaz Islands 5 . . . 


10.4 


n.a. 6 


n.a. 


TOTAL BRAZIL 2 


8,547,404 


100.0 





1 — means negligible. 

2 Figures may not add to totals because of rounding. 

3 Area under litigation between Ceara and Piaui. 

4 Includes area of State District of Fernando de Noronha (18.4 square kilometers) . 

5 Administered by Espirito Santo. 

6 n.a. — not available. 

Source. Based on information from the World Wide Web home page of Fundacao Insti- 
tuto Brasileiro de Geografia e Estatistica (http://www.ibge.gov.br), Diretoria 
de Geociencias, Departamento de Cartografia, Rio de Janeiro, 1996. 



Table 4. Real Rate of Growth of Gross Domestic Product ( GDP) and of 
Agriculture, Industry, and Services Sectors, 1950- 



(in percentages) 



Year 


GDP 


Agriculture 


Industry 


Servic 


1950 


6.8 


1.5 


11.3 


7.1 


1951 


4.9 


0.7 


6.4 


9.9 


1952 


7.3 


9.1 


5.0 


10.8 


1953 


4.7 


0.2 


8.7 


-0.1 


1954 


7.8 


7.9 


8.7 


13.0 


1955 


8.8 


7.7 


10.6 


3.5 


1956 


2.9 


-2.4 


6.9 


4.7 


1957 


7.7 


9.3 


5.7 


9.0 


1958 


10.8 


2.0 


16.2 


5.4 


1959 


9.8 


5.3 


11.9 


1.2 


1960 


9.4 


4.9 


9.6 


13.0 


1961 


8.6 


7.6 


10.6 


11.9 


1962 


6.6 


5.5 


7.8 


3.3 


1963 


0.6 


1.0 


0.2 


2.9 


1964 


3.4 


1.3 


5.2 


2.0 


1965 


2.4 


12.1 


-4.7 


1.3 


1966 


6.7 


-1.7 


11.7 


5.8 


1967 


4.2 


5.7 


3.0 


5.8 


1968 


9.8 


1.4 


13.2 


8.9 



467 



Brazil: A Country Study 

Table 4. ( Continued) Real Rate of Growth of Gross Domestic Product 
(GDP) and of Agriculture, Industry, and Services Sectors, 1950- 

96 

(in percentages) 



Year 


GDP 


Agriculture 


Industry 


Services 


1969 


9.5 


6.0 


12.2 


8.4 


1970 


10.3 


5.6 


10.4 


10.2 


1971 


11.3 


10.2 


11.8 


11.2 


1972 


11.9 


4.0 


14.2 


12.4 


1973 


14.0 


0.1 


17.0 


15.6 


1974 


8.2 


1.3 


8.5 


10.6 


1975 


5.2 


6.6 


4.9 


5.0 


1976 


10.3 


2.4 


11.7 


11.6 


1977 


4.9 


12.1 


3.1 


5.0 


1978 


5.0 


-2.7 


6.4 


6.2 


1979 


5.8 


4.7 


6.8 


7.8 


1980 


9.2 


9.5 


9.2 


9.0 


1981 


-4.4 


8.0 


-8.9 


-2.2 


1982 


0.7 


-0.5 


0.0 


2.0 


1983 


-3.4 


-0.6 


-5.8 


-0.8 


1984 


5.0 


3.4 


6.6 


4.1 


1985 


8.3 


10.0 


8.3 


6.5 


1986 


7.5 


-8.0 


11.8 


8.3 


1987 


3.6 


15.0 


1.0 


3.3 


1988 


-0.1 


0.8 


-2.6 


2.3 


1989 


3.3 


2.9 


2.9 


3.8 


1990 


-4.0 


-3.7 


-8.0 


-0.8 


1991 


0.3 


2.8 


-1.8 


1.6 


1992 


-0.8 


5.4 


-3.7 


0.0 


1993 


4.2 


-1.0 


6.9 


3.5 


1994 


6.0 


9.3 


7.0 


4.2 


1995 


4.3 


5.1 


2.1 


6.0 


1996 


2.9 


3.1 


2.3 


3.0 



Source: Based on information from Fundacao Getulio Vargas, Conjuntura Economica 
[Rio de Janeiro], various issues; Fundacao Instituto Brasileiro de Geografia e 
Estatistica, Estatisticas historicas do Brasil, Rio de Janeiro, 1990; and Fundacao 
Instituto Brasileiro de Geografia e Elstatistica, Sistema IBGE de Recuperagao 
Automdtica — SIDRA 97 (Internet address: http://www.sidra.ibge.gov.br). 



468 



Appendix 



Table 5. Principal Components of the Current Account, 1970-96 
(in millions of United States dollars) 



Year 


i 

Exports 


i 

Imports 


Trade 
Balance 2 


Net 
Services 


Current 
Account 2 


1970 


2,739 


2,507 


232 


-815 


-562 


1971 


2,904 


3,245 


-341 


-980 


-1,307 


1972 


3,991 


4,235 


-244 


-1,250 


-1,489 


1973 


6,199 


6,192 


7 


-1,722 


-1,688 


1974 


7,951 


12,641 


-4,690 


-2,433 


-7,122 


1975 


8,670 


12,210 


-3,540 


-3,162 


-6,700 


1976 


10,128 


12,383 


-2,255 


-3,763 


-6,017 


1977 


12,120 


12,023 


97 


-4, 134 


-4,037 


1978 


12,659 


13,683 


-1,024 


-6,037 


-6,990 


1979 


15,244 


18,084 


-2,840 


-7,920 


-10,742 


1980 


20,132 


22,955 


-2,823 


-10,152 


-12,807 


1981 


23,293 


22,091 


1,202 


-13,135 


-11,734 


1982 


20,175 


19,395 


780 


-17,083 


-16,311 


1983 


21,899 


15,429 


6,470 


-13,415 


-6,837 


1984 


27,005 


13,916 


13,090 


-13,215 


45 


1985 


25,639 


13,153 


12,486 


-12,877 


-241 


1986 


22,348 


14,044 


8,304 


-13,694 


-5,304 


1987 


26,224 


15,052 


11,172 


-12,678 


-1,436 


1988 


33,789 


14,605 


19,184 


-15,104 


4,174 


1989 


34,383 


18,263 


16,120 


-14,800 


1,564 


1990 


31,414 


20,661 


10,753 


-15,369 


-3,782 


1991 


31,620 


21,041 


10,579 


-13,542 


-1,407 


1992 


35,793 


20,554 


15,239 


-11,339 


6,143 


1993 


38,597 


25,256 


13,341 


-15,585 


-592 


1994 


43,545 


33,079 


10,466 


-13,542 


-1,689 


1995 


46,506 


49,621 


-3,115 


-11,339 


-17,742 


1996 


47,747 


53,286 


-5,539 


-15,585 


-24,347 



Free on board. 

Figures may not add to balances because of rounding. Current account balance includes unilateral transfers (not 
shown) . 



Source: Based on information from Fundacao Instituto Brasileiro de Geografia e 
Estatistica, Estatisticas historicas do Brasil, Rio de Janeiro, 1964—86; Fundacao 
Instituto Brasileiro de Geografia e Estatistica, Anudrio estatistico do Brasil, Rio de 
Janeiro, 1990; and Fundacao Getulio Vargas, Conjuntura Economica [Rio de 
Janeiro] , May 1 991 . 



469 



Brazil: A Country Study 



Table 6. Nominal and Real Interest Rates in International Markets, 

1970-96 1 
(in percentages) 



Year 


Nominal 
LIBOR 2 


Nominal 
United 
States 
Prime Rate 


WP1 

Industrial 
Countries^ 


Real LIBOR 


Real United 

States 
Prime Rate 


1970 


8.9 


7.7 


4.1 


4.8 


3.6 


1971 


7.1 


5.7 


3.3 


3.8 


2.4 


1972 


6.0 


5.3 


4.0 


2.0 


1.3 


1973 


9.4 


8.0 


12.4 


-3.0 


-4.4 


1974 


10.8 


10.8 


21.0 


-10.2 


-10.2 


1975 


7.8 


7.9 


8.3 


-0.6 


-0.4 


1976 


6.1 


6.8 


7.1 


-1.0 


-0.3 


1977 


6.4 


6.8 


7.2 


-0.8 


-0.4 


1978 


9.2 


9.1 


5.7 


3.5 


3.4 


1979 


12.2 


12.7 


10.9 


1.3 


1.8 


1980 


14.0 


15.3 


13.8 


0.2 


1.5 


1981 


16.7 


18.9 


9.0 


7.7 


9.9 


1982 


13.6 


14.9 


5.4 


8.2 


9.5 


1983 


9.9 


10.8 


3.3 


6.6 


7.5 


1984 


11.3 


12.0 


3.6 


7.7 


8.4 


lyoD 


o.D 


Q Q 

y.y 


1.3 


7 1 
/. 1 


ft A 

o.4 


1986 


6.9 


8.4 


-3.3 


10.2 


11.7 


1987 


7.3 


8.2 


0.9 


6.4 


7.3 


1988 


8.1 


9.3 


3.0 


5.1 


6.3 


1989 


9.3 


10.9 


4.4 


4.9 


6.5 


1990 


8.4 


10.0 


2.7 


5.7 


7.3 


1991 


6.1 


8.5 


0.6 


5.5 


7.9 


1992 


3.6 


6.0 


0.5 


3.1 


5.5 


1993 


3.4 


6.0 


0.5 


2.9 


5.5 


1994 


5.1 


7.7 


1.1 


4.0 


6.6 


1995 


5.9 


9.0 


3.1 


2.8 


5.9 


1996 


5.7 


8.3 


1.0* 


4.7 


7.3 



Interest rates are averages for the year. 

2 The LIBOR (London Interbank Offered Rate) is the rate on six-month deposits in United States dollars. 

3 The'U'PI (Wholesale Price Index) is a weighted average for tventv-two industrialized countries. 

4 Preliminarv estimate. 



Source: Based on information from International Monetary Fund, International Finan- 
cial Statistics, Washington, various issues. 



470 



Appendix 



Table 7. Index of Real Gross Domestic Product, 1950-96 
(1970=100) 

, r Index , 7 Index 

Year .. s Year ,. . 

(in percentages) (in percentages) 

1950 28.7 1974 155.1 

1951 30.4 1975 163.2 

1952 33.0 1976 179.1 

1953 33.9 1977 187.4 

1954 37.3 1978 196.5 

1955 39.9 1979 210.6 

1956 41.1 1980 229.9 

1957 44.4 1981 219.8 

1958 47.9 1982 221.1 

1959 50.5 1983 213.5 

1960 55.4 1984 224.8 

1961 60.2 1985 242.7 

1962 64.4 1986 261.1 

1963 65.4 1987 270.5 

1964 67.3 1988 270.3 

1965 69.1 1989 279.2 

1966 71.7 1990 267.9 

1967 75.2 1991 270.8 

1968 83.6 1992 268.4 

1969 91.9 1993 279.7 

1970 100.0 1994 295.8 

1971 111.5 1995 308.5 

1972 124.8 1996 317.4 

1973 142.3 

Source: Based on information from Fundacao Institute Brasileiro de Geografia e 
Estatistica, Estattsticas historicas do Brasil, Rio de Janeiro, 1990; Fundacao Insti- 
tute Brasileiro de Geografia e Estatistica, Anudrio estatistico do Brasil, various 

issues; and Fundacao Institute Brasileiro de Geografia e Estatistica, Sistema 

IBGE de Recuperagdo Automdtica — SIDRA 97 (Internet address: http:// 
www.sidra.ibge.gov.br) . 



471 



Brazil: A Country Study 



Table 8. Index of Average Real Minimum Wage, 1960-96 
(1980=100) 

Year Index Y ear Index 

(in percentages) (in percentages) 

1960 129.94 1979 97.51 

1961 149.25 1980 100.00 

1962 127.14 1981 98.69 

1963 114.95 1982 99.12 

1964 119.89 1983 87.86 

1965 113.68 1984 81.24 

1966 102.40 1985 83.90 

1967 98.14 1986 82.29 

1968 98.80 1987 64.04 

1969 97.43 1988 63.23 

1970 95.56 1989 68.47 

1971 95.82 1990 46.72 

1972 92.69 1991 45.12 

1973 96.24 1992 45.46 

1974 90.83 1993 47.47 

1975 77.36 1994 36.09 

1976 95.52 1995 35.85 

1977 95.83 1996 36.39 

1978 97.92 



Source: Based on information from Donald V. Coes, Macroecononric Crises, Policies, and 
Growth in Brazil, 1964-90, Washington: World Bank, 1995; and Fundacao 
Getulio Vargas, Conjuntura Economica [Rio de Janeiro] , various issues. 



472 



Appendix 



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Brazil: A Country Study 



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476 



Appendix 



Table 12. Monetary Units, 1942-94 



Monetary Unit 



Date Created 



Relation to 
Preceding Unit 



Cruzeiro (Cr$) October 5, 1942 Cr$1.00=l,000 reis 

Cruzeiro novo (NCr$) February 8, 1967 NCr$1.00=Cr$l,000 

Cruzeiro (Cr$) May 15, 1970 Cr$1.00=NCr$1.00 

Cruzado (Cz$) February 28, 1986 Cz8l.OO=Cr8l.OOO 

Cruzado novo (NCzS) January 15, 1989 NCz$1.00=Cz 1,000 

Cruzeiro (Cr$) March 16, 1990 Cr$1.00=NCz$l,000 

Cruzeiro real (CR$) August 1, 1993 CR$1.00=Cr$l,000 

Real(R$) July 1,1994 R$1.00=CR$2,750 

Source: Based on information from Donald V. Coes, Macroeconomic Crises, Policies, and 
Growth in Brazil, 1964-90, Washington, 1995, 172. 



Table 13. Principal Components of the Balance of Payments, 1981-96 
(in millions of United States dollars) 



Year 


Trade 
Balance 


Net 
Services 


Current 
Account 


Capital 
Account 


Interest 
Payments 


1981 


1,202 


-13,135 


-11,734 


12,773 


-9,161 


1982 


780 


-17,083 


-16,311 


7,851 


-13.494 


1983 


6,470 


-13,415 


-6,837 


2,103 


-11,008 


1984 


13,090 


-13,215 


45 


253 


-11,471 


1985 


12,486 


-12,877 


-241 


-2,554 


-11,259 


1986 


8,304 


-13,694 


-5,304 


-7,108 


-11,126 


1987 


11,172 


-12,678 


-1,436 


-7,986 


-10,318 


1988 


19,184 


-15,104 


4,174 


-8,685 


-12,085 


1989 


16,120 


-14,800 


1,564 


-4,179 


-12,016 


1990 


10,753 


-15,369 


-3,782 


-4,715 


-9,748 


1991 


10,579 


-13,542 


-1,407 


^,148 


-8,621 


1992 


15,239 


-11,339 


6,143 


25,271 


-7,253 


1993 


13,341 


-15,585 


-592 


10,115 


-8,280 


1994 


10,466 


-13,542 


-1,689 


14,294 


-6,338 


1995 


-3,115 


-11,339 


-17,742 


30,703 


-8,158 


1996 


-5,539 


-15,585 


-24,347 


n.a 1 


-9,840 


1 n.a. — not available. 



Source: Based on information from Fundacao Instituto Brasileiro de Geografia e 
Estatistica, Estatisticas historicas do Brasil, Section 11.6, Rio de Janeiro, 1981-86; 
Fundacao Instituto Brasileiro de Geografia e Estatistica, Anudrio estatistico do 
Brasil, 1986-88, Rio de Janeiro, 1990; and Fundacao Getulio Vargas, Conjun- 
tura Economica [Rio de Janeiro], various issues, 1989-96. 



477 



Brazil: A Country Study 



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478 



Appendix 



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479 



Brazil: A Country Study 



Table 15. Annual Inflation Rate, 1964-96 
(in percent change in consumer price index) 1 

Year Index Year Index 

1964 83.9 1981 109.9 

1965 37.0 1982 95.4 

1966 37.6 1983 154.5 

1967 24.3 1984 220.6 

1968 23.5 1985 225.5 

1969 20.0 1986 142.3 

1970 19.0 1987 224.8 

1971 19.2 1988 684.5 

1972 15.6 1989 1,320.0 

1973 15.7 1990 2,739.7 

1974 33.6 1991 414.7 

1975 29.0 1992 991.4 

1976 45.0 1993 2,103.7 

1977 42.7 1994 2,406.8 

1978 38.7 1995 14.8 

1979 53.9 1996 9.3 

1980 100.2 



1 The price index on which the series is based is the Indice Geral de Precos — Disponibilidade Interna (General 
Index of Prices — Internal Availability) . 

Source: Based on information from Fundacao Getulio Vargas, Conjuntura Economica 
[Rio de Janeiro] , various issues. 



480 



Appendix 



Table 16. Nominal Tariff Rate Average by Sector, Selected Years, 

1980-94 
(in percentages) 

Sector 1980 1990 1991 1 1992 1 1993 1 1994 : 



Agricultural and forestry 
products 


16.4 


12.7 


11.0 


9.9 


9.1 


n.a. 2 


Beverages 


179.0 


75.2 


63.7 


53.5 


34.7 


19.7 


Chemicals 


48.2 


17.5 


13.1 


11.7 


10.0 


9.5 


Clothing and foot- 
wear 


181.2 


38.3 


33.6 


27.0 


20.3 


16.4 


Communications and 
electrical products . . 


95.4 


45.2 


37.0 


31.9 


26.2 


21.5 


Food products 


107.8 


26.7 


20.7 


17.0 


14.9 


13.1 


Furniture 


148.2 


38.6 


31.7 


24.7 


20.0 


20.0 


Machinery and 

equipment 


56.3 


40.7 


30.7 


26.1 


21.3 


19.6 


Metals 


77.4 


27.0 


20.8 


17.6 


14.6 


12.3 


Mining 


27.0 


6.0 


3.8 


2.2 


1.4 


1.1 


Nonmetallic mineral 
products 


109.4 


25.9 


14.8 


12.2 


8.3 


7.2 


Paper and paper 

products 


120.2 


18.1 


9.6 


7.7 


6.8 


6.7 


Perfumes and 

cosmetics 


160.5 


58.2 


41.6 


28.7 


24.0 


19.6 


Pharmaceuticals 


27.9 


24.7 


18.5 


15.7 


12.8 


12.6 


Plastics 


203.8 


39.2 


35.3 


30.0 


21.5 


18.8 


Rubber and rubber 
products 


107.3 


51.4 


36.7 


29.3 


20.7 


15.2 


Textiles 


167.3 


35.7 


34.7 


27.6 


23.8 


17.0 


Tobacco products 


184.6 


79.1 


69.5 


60.0 


37.3 


19.1 


Transportation 

equipment 


101.9 


47.0 


37.0 


31.4 


25.7 


21.3 


Wood and wood 

products 


125.3 


21.1 


11.3 


10.7 


10.2 


9.9 


Miscellaneous 


87.0 


43.9 


35.0 


28.5 


22.4 


17.3 


Simple average 


115.8 


31.4 


24.6 


20.4 


16.4 


13.6 


Standard deviation .... 


51.7 


17.7 


15.2 


12.6 


9.3 


6.9 



Projected. 

n.a. — not available. 



Source: Based on information from Honorio Kume and Guida Piani, "A politica de 
importacao no periodo 1991-1994," Rio de Janeiro, 1991. 



481 



Brazil: A Country Study 



Table 17. Foreign Trade by Major Product, Selected Years, 1978-96 
(in millions of United States dollars) 



Prr^rli 1 r t 
x I KJ yJ. UC L 


1978 


1982 


1986 


1990 


1 QQfi 


iLxports 












Primary products 












Coffee 


1,947 


1,858 


2,006 


1,102 


1,719 




l.U/o 


1,84 / 


1,015 


o Ann 


2,693 


Soybeans 


1,050 


1,619 


1,253 


1,609 


3,743 


Sugar 


196 


259 


141 


289 


936 


Other 


1,757 


2,655 


2,265 


3,342 


3,094 


Total primary 












products 


5,978 


8,238 


7,280 


8,751 


12,185 


Manufactured 












products 












Iron and steel 


172 


795 


1,179 


1,644 


2,574 


Machinery 


566 


1,191 


1,471 


2,474 


2,211 


Orange juice 


333 


575 


678 


1,468 


1,389 


Transportation 












equipment 


828 


1,718 


1,568 


2,181 


2,464 


Other 


4,605 


7,407 


9,999 


14,318 


26,103 


Total manu- 












factured 














6,504 


11,686 


14,895 


22,085 


34,741 


Other 


177 


251 


173 


578 


821 


Total 












exports . . . 


12,659 


20,175 


22,348 


31,414 


47,747 


Imports 












Chemicals 


893 


1,003 


1,352 


1,691 


6,677 


Fertilizers 


309 


239 


325 


319 


426 


Fuels and 












lubricants 


4,483 


10,457 


3,540 


5,363 


6,906 




702 


848 


823 


251 


2,105 


Other 


7,296 


6,848 


8,004 


12,782 


37,172 


Total 












imports . . . 


13,683 


19,395 


14,044 


20,406 


53,286 


TRADE BALANCE . . . 


-1,024 


780 


8,304 


11,008 


-5,539 



Free on board. Figures may not add to totals or balances because of rounding. 



Source: Based on information from Fundacao Getulio Vargas, Conjuntura Economica 
[Rio de Janeiro], various issues; and Fundacao Instituto Brasileiro de Geogra- 
fia e Estatistica, Estatisticas hist&ricas do Brasil, Rio de Janeiro, 1964—97. 



482 



Appendix 



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483 



Brazil: A Country Study 



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484 



Appendix 



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Brazil: A Country Study 



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486 



Appendix 



Table 20. Direct Elections for Governor by State and Party, 1982, 
1986, 1990, and 1994: Winning Parties 



State 



1982 



1986 



1990 



1994 J 



Acre 

Alagoas 

Amapa 

Amazonas 

Bahia 

Ceara 

Espirito Santo 

Goias 

Maranhao 

Mato Grosso 

Mato Grosso do Sul . . 

Minas Gerais 

Para 

Paraiba 

Parana 

Pernambuco 

Piaui 

Rio de Janeiro 

Rio Grande do Norte 
Rio Grande do Sul . . . 

Rondonia 

Roraima 

Santa Catarina 

Sao Paulo 

Sergipe 

Toe an tins 

Federal District 



PMDB 2 


PMDB 


PDS 3 


PPR 4 , PMDB 


PDS 


PMDB 


PSC 5 


PMDB 


n.a. 6 


n.a. 


PFL 7 


PSB 8 , PTB 9 


PMDB 


PMDB 


PMDB 


PPR 


PDS 


PMDB 


PFL 


PFL, PMN 10 


PDS 


PMDB 


PSDB 11 


PSDB 


PMDB 


PMDB 


PDT 12 


PT 13 , PSD 14 


PMDB 


PMDB 


PMDB 


PMDB, PP 15 


PDS 


PMDB 


PFL 


PFL, PPR 


PDS 


PMDB 


PFL 


PDT 


PMDB 


PMDB 


PTB 


PMDB 


PMDB 


PMDB 


PTB 


PP, PSDB 


PMDB 


PMDB 


PMDB 


PPR, PSDB 


PDS 


PMDB 


PMDB 


PMDB, PDT 


PMDB 


PMDB 


PMDB 


PDT 


PDS 


PMDB 


PFL 


PSB 


PDS 


PMDB 


PFL 


PFL, PMDB 


PDT 


PMDB 


PDT 


PSDB, PDT 


PDS 


PMDB 


PFL 


PMDB 


PDS 


PMDB 


PDT 


PMD5.PT 


n.a. 


PMDB 


PTR 


PMDB, PDT 


n.a. 


n.a. 


PTB 


PTB, PSDB 


PDS 


PMDB 


PFL 


PPR, PMDB 


PMDB 


PMDB 


PMDB 


PSDB, PTB 


PDS 


PFL 


PFL 


PDT, PSDB 


n.a. 


PDC 16 


PMDB 


PPR 


n.a. 


n.a. 


PTR 17 


PTB, PT 



1 Nine states elected governors in the first round (October 3, 1994) , and eighteen states elected governors in the 
second round (November 15, 1994). Italicized party won. 

2 Partido do Movimento Democratico Brasileiro (Brazilian Democratic Movement Party). 

3 Partido Democratico Social (Democratic Social Party). 

4 Partido Progressista Renovador (Progressive Renewal Party) . 

5 Partido Social Cristao (Social Christian Party). 

6 n.a. — not available. 

7 Partido da Frente Liberal (Liberal Front Party). 

8 Partido Socialista Brasileiro (Brazilian Socialist Party). 

9 Partido Trabalhista Brasileiro (Brazilian Labor Party). 

10 Partido da Mobilizacao Nacional (National Mobilization Party). 

11 Partido da Social Democracia Brasileira (Brazilian Social Democracy Party). 

12 Partido Democratico Trabalhista (Democratic Labor Party). 

13 Partido dos Trabalhadores (Workers' Party). 

14 Partido Social Democratico (Social Democratic Party). 

15 Partido Progressista (Progressive Party). 

16 Partido Democratico Cristao (Christian Democratic Party) . Elected in 1988. 

17 Partido Trabalhista Renovador (Workers Renewal Party) . 

Source: Based on official electoral data provided by David V. Fleischer. 



487 



Brazil: A Country Study 



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488 



Appendix 




489 



Brazil: A Country Study 



Table 22. Presidential Election, November 15, 1989: First-Round 

Results 



Candidate Party Number of Votes Percentage of 



Fernando Collor de Mello PRN 1 20,611,030 28.5 

Luis Inacio "Lula" da Silva PT 2 11,622,321 16.1 

Leonel Brizola PDT 3 11,167,665 15.5 

Mario Covas PSDB 4 7,790,381 10.8 

Pedro Maluf PDS 5 5,986,585 8.3 

Afif PL 6 3,272,520 4.5 

Ulysses Guimaraes PMDB 7 3,204,996 4.4 

Roberto Freire PCB 8 769,117 1.1 

Aureliano PFL 9 600,821 0.8 

RCaiado PSD 10 488,893 0.7 

ACamargo PTB 11 379,284 0.5 

Other n.a. 12 1,732,273 2.6 

Total valid votes n.a. 67,625,886 n.a. 

Blank n.a. 1,176,367 1.6 

Void n.a. 3,487,963 4.8 

Total votes cast 13 n.a. 72,290,216 100.0 

Abstention n.a. 9,784,502 n.a. 

ELECTORATE n.a. 82,074,718 n.a. 



1 Partido da Reconstrucio National (National Reconstruction Party). 

2 Partido dos Trabalhadores (Workers' Party) . 

3 Partido Democratico Trabalhista (Democratic Labor Party). 

4 Partido da Social Democratia Brasileira (Brazilian Social Democracy Party). 

5 Partido Democratico Social (Democratic Social Party) . 

6 Partido Liberal (Liberal Party). 

7 Partido do Movimento Democratico Brasileiro (Brazilian Democratic Movement Party). 

8 Partido Comunista Brasileiro (Brazilian Communist Party). 

9 Partido da Frente Liberal (Liberal Front Party) . 

10 Partido Social Democratico (Social Democratic Party). 

11 Partido Trabalhista Brasileiro (Brazilian Labor Party) . 

12 n.a. — not applicable. 

13 Figures may not add to totals because of rounding. 

Source: Based on information from Superior Electoral Court provided by David V. 
Fleischer. 



490 



Appendix 



CM 



1 § 



1> to 



8 S 



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3 

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& 
§ 



491 



Brazil: A Country Study 



Table 24. Composition of the Federal Senate, Chamber of Deputies, 
and State Assemblies by Party, 1991 and 1995 



Party 



Federal Senate Chamber of Deputies State Assemblies 



1991 



1995 1 



1991 



1995 



1991 



1995 



PCB 2 /PPS 3 1 3 2 3 

PC do B 4 5 10 8 

PDS 5 -PDC 6 /PPR 7 ... 7 6 65 53 133 

PDT 8 5 6 47 33 91 

PFL 9 15 19 82 89 171 

PL 10 1 16 13 51 

PMDB 11 22 22 108 107 214 

PMN 12 14 6 

PRN 13 3 40 1 73 

PRP 14 1 

PSB 15 1 1 11 15 17 

PSC 16 6 3 13 

PSD 17 13 2 

PSDB 18 10 10 37 62 74 

PT 19 1 5 35 49 83 

PTB 20 8 5 38 31 79 

PTR 21 -PST 22 /PP 23 5 4 36 25 

PV 24 1 

Other 4 4 6 

TOTAL 76 81 503 513 1,049 

1 Three seats sub judice. 

2 Partido Comunista Brasileiro (Brazilian Communist Party). 
s Partido Popular Socialista (Popular Socialist Party). 

4 Partido Comunista do Brasil (Communist Party of Brazil) . 

5 Partido Democratico Social (Democratic Social Party). 

6 Partido Democratico Cristao (Christian Democratic Party). 

7 Partido Progressista Renovador (Progressive Renewal Party) . 

8 Partido Democratico Trabalhista (Democratic Labor Party). 

9 Partido da Frente Liberal (Liberal Front Party) . 

10 Partido Liberal (Liberal Party). 

11 Partido do Movimento Democratico Brasileiro (Brazilian Democratic Movement Party). 

12 Partido da Mobilizacao Nacional (National Mobilization Party). 

13 Partido da Reconstruct Nacional (National Reconstruction Party). 

14 Partido Revolurionario do Proletariado (Revolutionary Party of the Proletariat). 

15 Partido Socialista Brasileiro (Brazilian Socialist Party). 

16 Partido Social Cristao (Social Christian Party). 

17 Partido Social Democratico (Social Democratic Party). 

18 Partido da Social Democracia Brasileira (Brazilian Social Democracy Party). 

19 Partido dos Trabalhadores (Workers' Party). 

20 Partido Trabalhista Brasileiro (Brazilian Labor Party). 

21 Partido Trabalhista Renovador (Workers Renewal Party) . 

22 Partido Social Trabalhista (Social Workers Party) . 

23 Partido Progressista (Progressive Party). 

24 Partido Verde (Green Party) . 

Source: Based on official electoral data provided by David V. Fleischer. 



3 
8 

113 
88 
159 
50 
205 
18 
2 
7 
34 
19 
20 
93 
92 
72 
54 
4 
4 

1,045 



492 



Appendix 



Table 25. Presidential Election, October 3, 1994: First-Round Results 



Candidate 



Party 



Number 
of Votes 



Percentage Percentage Percentage 
of of Votes of Valid 



Electorate 1 



Cast 1 



Votes 1 



Fernando Henrique PSDB 2 - 34,365,895 36.3 44.1 54.3 

Cardoso PFL 3 - 

PTB 4 

LuisInacio"Lula"da PT 5 - 18.1 22.0 27.0 

Silva PSB 6 -PC 17,122,384 

doB 7 - 
PPS 8 - 
PV 9 - 
PSTU 10 

Eneas Ferreira Prona 11 4,671,540 4.9 6.0 7.4 

Carneiro 

Orestes Quercia. . . . PMDB 12 - 2,772,242 2.9 3.6 4.4 
PSD 13 

Leonel Brizola PDT 14 2,015,853 2.1 2.6 3.2 

Esperidao Amin . . . . PPR 15 1,739,926 1.8 2.2 2.8 

Carlos Gomes PRN 16 387,756 0.4 0.5 0.6 

Hernani Fortuna . . . PSC 17 238,209 0.3 0.3 0.4 

Total valid votes 63,313,805 n.a. 18 n.a. 100 

Blank 7,192,255 7.6 9.2 n.a. 

Void 7,444,197 7.9 9.6 n.a. 

Total votes cast 77,950,257 n.a. 100 n.a. 

Abstention 16,832,153 17.8 n.a. n.a. 

ELECTORATE 94,782,410 100 n.a. n.a. 

1 Figures may not add to totals because of rounding. 

2 Partido da Social Democracia Brasileira (Brazilian Social Democracy Party) . 

3 Partido da Frente Liberal (Liberal Front Party) . 

4 Partido Trabalhista Brasileiro (Brazilian Labor Party). 

5 Partido dos Trabalhadores (Workers' Party). 

6 Partido Socialists Brasileiro (Brazilian Socialist Party) . 

7 Partido Comunista do Brasil (Communist Party of Brazil) . 

8 Partido Popular Socialists (Popular Socialist Party) . 

9 Partido Verde (Green Party). 

10 Partido Social Trabalhista Unificada (Unified Social Workers Party). 

11 Partido da Redefinicao da Ordem Nacional (National Order Redefinition Party). 

12 Partido do Movimento Democratico Brasileiro (Brazilian Democratic Movement Party). 

13 Partido Social Democratico (Social Democratic Party). 

14 Partido Democratico Trabalhista (Democratic Labor Party). 

15 Partido Progressista Renovador (Progressive Renewal Party). 

16 Partido da Reconstrucao Nacional (National Reconstruction Party). 

17 Partido Social Cristao (Social Christian Party) . 

18 n.a. — not applicable. 

Source: Based on information from final electoral data of Superior Electoral Court, 
November 15, 1994, provided by David V. Fleischer. 



493 



Brazil: A Country Study 



Table 26. Party Blocs in the National Congress, 1995 



Bloc and Party 



Seats in 
Federal Senate 



Seats in Chamber 
of Deputies 



Pro-government 

PFL 1 19 

PSDB 2 10 

PTB 3 5 

Total pro-government 34 

Potential government allies 

PL 4 1 

PMDB 5 22 

PP 6 5 

PPR 7 6 

Total potential government allies 34 

Undefined 

PMN 8 

PRN 9 

PRP 10 

PSC 11 

PSD 12 

Total undefined 

Opposition 

PCdoB 13 

PDT 14 6 

PPS 15 1 

PSB 16 1 

PT 17 5 

PV 18 

Total opposition 13 

TOTAL 81 

1 Partido da Frente Liberal (Liberal Front Party). 

2 Partido da Social Democracia Brasileira (Brazilian Social Democracy Party) . 

3 Partido Trabalhista Brasileiro (Brazilian Labor Party) . 

4 Partido Liberal (Liberal Party). 

5 Partido do Movimento Democratico Brasileiro (Brazilian Democratic Movement Party). 

6 Partido Progressista (Progressive Party) . 

7 Partido Progressista Renovador (Progressive Renewal Party). 

8 Partido da Mobilizacao Nacional (National Mobilization Party) . 

9 Partido da Reconstrucao Nacional (National Reconstruction Party). 

10 Partido Revolucionario do Proletariado (Revolutionary Party of the Proletariat). 

11 Partido Social Cristao (Social Christian Party). 

12 Partido Social Democratico (Social Democratic Party). 

13 Partido Comunista do Brasil (Communist Party of Brazil). 

14 Partido Democratico Trabalhista (Democratic Labor Party). 

15 Partido Popular Socialista (Popular Socialist Party). 

16 Partido Socialista Brasileiro (Brazilian Socialist Party) . 

17 Partido dos Trabalhadores (Workers' Party). 

18 Partido Verde (Green Party). 

Source: Based on official electoral data provided by David V. Fleischer. 



62 
31 
182 

13 
107 
36 
53 
209 

4 
1 
1 
3 
3 
12 

10 
33 

2 
15 
49 

1 

110 
513 



494 



Appendix 



Table 27. Regional Strength of Parties by Blocs in the Chamber of 
Deputies, 1995 
(in percentages of region's votes) 



Bloc and Party 


Center- 
West 


North 


North- 
east 


South 


South- 
east 


Brazil 


Pro-government 
PFL 1 


7.3 


12.3 


33.8 


13.0 


9.5 


17.3 


PSDB 2 


7.3 


7.7 


13.9 


3.9 


16.8 


12.1 


PTB 3 


7.3 


9.2 


1.3 


7.8 


7.8 


6.0 


Total pro-govern- 
ment 






aq n 
4y.U 


94 7 
24. / 


Q.A 1 
34. 1 


at; a 


Potential government allies 














PT 4 
it, 


9 4 


1.5 


1.3 


0.0 


5.0 


2.5 


PMDB 5 


26.9 


26.2 


19.9 


22.0 


17.9 


20.9 


pp6 






4.U 


1 a 


0. 1 


/.U 


rrK. 




9^ 9 


A 

4.0 


XD.O 


A Q 

o.y 


in i 

1U. 1 


Total potential govern- 
ment allies 


53.7 


60.1 


29.8 


45.4 


37.9 


40.5 


Undefined 














PMN 8 


0.0 


0.0 


2.0 


0.0 


0.6 


0.8 


PRN 9 


2.4 


0.0 


0.0 


0.0 


0.0 


0.2 


pR plO 


0.0 


0.0 


0.0 


0.0 


0.6 


0.2 


PSC 11 


0.0 


1.5 


1.3 


0.0 


0.0 


0.6 


PSD 12 


0.0 


0.0 


0.7 


0.0 


1.1 


0.6 


Total undefined 


2.4 


1.5 


4.0 


0.0 


2.3 


2.4 


Opposition 
PC doB 13 


4.9 


1.5 


1.3 


1.3 


2.2 


2.0 


PDT 14 


4.9 


1.5 


4.6 


13.0 


7.2 


6.6 


PPS 15 


2.4 


0.0 


0.0 


0.0 


0.6 


0.4 


PSB 16 


0.0 


3.1 


6.7 


0.0 


1.7 


2.9 


PT 17 


9.8 


3.1 


4.6 


15.6 


13.4 


9.6 


p V 18 


0.0 


0.0 


0.0 


0.0 


0.6 


0.2 


Total opposition 


22.0 


9.2 


17.2 


29.9 


25.7 


21.7 


TOTAL 


100.0 


100.0 


100.0 


100.0 


100.0 


100.0 


Number of seats 


(41) 


(65) 


(151) 


(77) 


(179) 


(513) 



Partido da Frente Liberal (Liberal Front Party). 

2 Partido Social Democracia Brasileira (Brazilian Social Democracy Party) . 

3 Partido Trabalhista Brasileiro (Brazilian Labor Party). 

4 Partido Liberal (Liberal Party) . 

5 Partido do Movimento Democratico Brasileiro (Brazilian Democratic Movement Party). 

6 Partido Progressista (Progressive Party). 

7 Partido Progressista Renovador (Progressive Renewal Party). 

8 Partido da Mobilizacao National (National Mobilization Party) . 

9 Partido da Reconstrucao Nacional (National Reconstruction Party). 

10 Partido Revolucionario do Proletariado (Revolutionary Party of the Proletariat). 



495 



Brazil: A Country Study 



Partido Social Cristio (Social Christian Party) . 
Partido Social Democratico (Social Democratic Party). 
Partido Comunista do Brasil (Communist Party of Brazil) . 
Partido Democratico Trabalhista (Democratic Labor Party) . 
Partido Popular Socialista (Popular Socialist Party). 
Partido Socialista Brasileiro (Brazilian Socialist Party). 
Partido dos Trabalhadores (Workers' Party). 
Partido Verde (Green Party). 



Source: Based on official electoral data provided by David V. Fleischer. 



496 



Appendix 



I 



g 



5 

11 

1 8 



t 



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f 


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(1,000 






2& Mi 


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(millions of 
US dollars; 







> f N 

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oO 00 oO 



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§ 8 § 



3 o> h o> 

CM <m ,-. 



497 



Brazil: A Country Study 



Ph .2 a 



O 2 o « 2? 



II 



CT> 00 



498 



Appendix 



Table 29. Major Army Equipment, 1997 



Type and Description 



Country of Origin In Inventory 



Medium batde tanks 

Leopard 1A4 

Light tanks 

M-3A1 

M-41B/C 

Armored personnel carriers 

EE-11 Urutu 

M-59 1 

M-113 

Armored reconnaissance vehicles 

EE-9 Cascavel 

M-8 

Mortars 

81mm 

M-30 

120mm 

Recoilless launchers 

57mm M-18A1 

75mm M-20 

105mm 

106mm M-40A1 

Light antitank guided weapons 

Cobra 

Aerospatiale Milan 3 (600-meter Eryx and 2,000- 
meter Euromissile) 

Air defense weapons 

20mm, 35mm 

35mm GDF-001 

40mm L-60/-70 (some with BOFI) 2 

Roland E SAM 

Artillery 

Towed 

155mm M-114 

105mm M-101/-102 (including 320 Model 56 
pack) 

Special 105mm M-7/-108 

Coastal 57mm, 75mm, 120mm, 150mm, 152mm, 
305mm 

Medium-range launchers 

SS-06 108mm 

Astros II 

Helicopters 

Aerospatiale SA-365K Dauphins 



Germany 

United States 
United States 

Brazil 
United States 
United States 

Brazil 
United States 

n.a. 1 
n.a 
n.a. 

n.a. 
n.a. 
n.a. 
n.a. 

United States 
France 

n.a. 
n.a. 
n.a. 
France 

n.a. 
n.a. 

n.a. 
n.a. 



n.a. 
Brazil 



France 



88 

150 
296 

219 
20 
584 

409 
30 

n.a. 
217 
85 

240 
20 
n.a. 
n.a. 

300 

n.a. 
200 
n.a. 
n.a. 
n.a. 



504 
98 



353 
74 



240 



n.a. 
4 



36 



499 



Brazil: A Country Study 



Table 29. ( Continued) Major Army Equipment, 1997 



Type and Description 


Country of Origin 


In Inventory 


Aerospatiale AS-550 Fennec 


France 


15 


Aerospatiale AS-350L-1 Esquilos (armed) .... 


France 


26 


Aerospatiale AS-355 


France 


16 



n.a. — not available. 

Bofors Optronic Fire-Control Instrument. 



Source: Based on information from The Military Balance, 1997-1998, London, 1997, 
209. 



Table 30. Major Naval Equipment, 1997 



Type and Description 



Country of Origin In Inventory 



Navy 

Aircraft carrier 

Minas Gerais (Colossus-class) Britain 

Missile destroyers 

Mato Grosso-class United States 

Missile frigates Britain, Germany, 

United States 

Corvettes 

Inhauma-class n.a. 1 

Submarines 

Humaita (Oberon) -class Britain 

Tupi-class (Type 209/1400) Germany 

Patrol and coastal combatants n.a. 

Mine countermeasures vessels 

Aratu-class Germany 

Amphibious United States 

Support and miscellaneous n.a. 

Lighthouse tenders and auxiliary hydrographic 
vessels 

River-class Britain 

Naval Aviation 

Naval helicopters (armed) n.a. 

Sikorsky S-70A Black Hawk United States 

SH-3B antisubmarine warfare United States 

SH-3D antisubmarine warfare United States 

SH-3G/H antisubmarine warfare United States 

Lynx HAS-21 attack Britain 

Lynx MK-21A Britain 

AS-332 utility France 



3 
3 
35 

6 
4 
26 



500 



Appendix 



Table 30. (Continued) Major Naval Equipment, 1997 



Type and Description 



Country of Origin In Inventory 



AS-350 armed utility France 12 

AS-355 armed utility France 9 

TH-57 training United States 13 

Marines 

Reconnaissance 

EE-9 Mk IV Cascavels Brazil 6 

Amphibious armored vehicles 

Transport landing vehicle, tracked personnel 

(LVTP-7A1) n.a. 11 

Armored personnel carriers 

M-113 United States 28 

EE-11 Urutu Brazil 5 

Towed artillery 

105mm n.a. 31 

M-101 United States 15 

LI 18 n.a. 18 

155mm n.a. 

M-114 United States 6 

Mortars 

Self-propelled, 81mm United States 2 

Rocket launchers 

3.5-inch, M-20, 89mm United States n.a. 

Recoilless launchers 

M-40A1, 106mm United States 8 

Air defense guns 

L/70 40mm with BOFI 2 n.a. 6 

1 n.a. — not available. 

2 Bofors Optronic Fire-Control Instrument. 

Source: Based on information from The Military Balance, 1997-1998, London, 1997, 
21 0; and George Palaczi-Horvath, "Brazil: Choices for a Navy with a Tight Bud- 
get," Naval Forces, 17, No. 1, 1996, 42-49. 



501 



Brazil: A Country Study 



Table 31. Major Air Force Equipment, 1997 



Type and Description 



Country of Origin In Inventory 



Fighters 

F-103E/D (Mirage I11E/DBR) United States 16 

Ground-attack fighters 

F-5E/-B/-F United States 46 

AMX Brazil 32 

Counterinsurgency aircraft 

AT-26 (EMB-326) Brazil 58 

Reconnaissance aircraft 

RC-95 United States 4 

RT-26 United States 10 

Learjet 35 Reconnaissance/VIP United States 12 

RC-130E United States 3 

Transports 

C-130H United States 9 

KC-130H United States 2 

KD-137 United States 4 

C-91 United States 12 

C-95A/B/C United States 18 

C-115 United States 17 

VC-91 United States 1 

VC/VU-93 United States 12 

VC-96 United States 2 

VC-97 United States 5 

VU-9 United States 5 

Boeing 737-200 United States 2 

VH-4 helicopters United States 3 

C-115 United States 7 

C-95A/B/C United States 86 

EC-9 (VU-9) United States 6 

Helicopters 

Aerospatiale AS-332 (armed) France 6 

Aerospatiale AS-355 France 8 

Bell 206 United States 4 

HB-350B United States 27 

OH-6A United States 4 

OH-13 United States 25 

Trainers 

C-95A/B/C United States 97 

AT-26 United States 38 

EMB-110 Brazil 97 

EMB-ALX (AT-29) Brazil 100 

T-23 Brazil 25 



502 



Appendix 



Table 31 . ( Continued) Major Air Force Equipment, 1 997 



Type and Description 


Country of Origin 


In Inventory 




. . Brazil 


no 
yo 


T 0*7 / r ~V. , „ „ „ \ 


Brazil 




A TV/fV T 


. . Brazil 


14 


Air-to-air missiles 








United States 


n.a. 




. . United States 


n.a. 




. . France 


n.a. 


Liaison/ observation 






T-27 


. . Brazil 


8 


TT *7 


. . Brazil 


31 


TTTTTTT/ _J\ 

UH-lH (armed) 


United States 


29 




United States 


50 


Cessna 208 


United States 


3 


U-42 


United States 


30 


Antisubmarine warfare 






S-2 


United States 


5 


S-2A 


United States 


7 


S-2E , 


United States 


6 


Marine reconnaissance/search and rescue 






EMB-110B 


Brazil 


11 


EMB-111 


Brazil 


20 



Source: Based on information from The Military Balance, 1997-1998, London, 1997, 
210. 



Table 32. Number of Fellowships Granted by the National Council for 
Scientific and Technological Development, 1995 



Fellowships 


In Brazil 


Abroad 


Total 




18,790 


n-a. 1 


18,790 


Graduate, nondegree {aperfeicoamento) 


2,397 


n.a. 


2,397 


Master's (MA.) degree students (mestrado) 


10,960 


5 


10,965 


Doctoral (Ph.D.) degree students 


4,965 


1,475 


6,440 


Postdoctoral fellowships 


89 


293 


382 


Senior training (estdgios senior) 


n.a. 


21 


21 


Salary supplement for faculty and full-time 








researchers {bolsas de pesquisa) 


3,594 


n.a. 


3,594 


TOTAL 


25,906 


n.a. 


25,906 



n.a. — not available. 



Source: Based on information provided by Simon Schwartzman. 



503 



Brazil: A Country Study 



Table 33. Signed Contracts of the Funding Authority for Studies and 

Projects, 1996* 

c N o u £l (usiS) *«—* A ssr 



Loans 

To industry: Support Program 
for Technological Develop- 
ment of Industry 2 1 

To consulting firms: Support 
Program for Users of Con- 
sulting Services 3 10 

To any firm: Support Program 
for Total Quality Manage- 
ment 4 26 

Total loans 87 

Grants to National Fund for 
Scientific and Technologi- 
cal Development 5 491 

Grants to World Bank Sector 
Loan to the Program in Sup- 
port of Scientific and Tech- 
nological Development 6 ... 128 

TOTAL 706 



180,939 50.0 3,547 

33,758 9.3 3,375 

76,626 21.1 2,947 

291,323 80.4 3,348 

61,003 16.8 124.2 

9,896 2.7 77.3 

362,222 100.0 513 



FLnanciadora de Estudos c Projetos (Finep) . Figures refer to contracts that may span several years, and not to 
expenditures. 

2 Programa de Apoio ao Desenvolvimento Tecnologico da Industria National (ADTEN) . 

3 Programa de Apoio aos Usuarios de Servicos de Consultoria (AUSC). 

4 Programa de Apoio a Gestio de Qualidade (AGQ) . 

5 Fundo Nacional de Desenvolvimento Cientifico e Tecnologico (FUNDCT). 

6 Programa de Apoio ao Desenvolvimento Cientifico e Tecnologico (PADCT). 

Source: Based on information from Financiadora de Estudos e Projetos, Diretoria opera- 
tional da Finep, 1 997. 



504 



Appendix 



Table 34. Fellowships of the Council for Advanced Professional 
Training Granted in 1991 and 1995 1 



Fellowships 


In Brazil 
(spontaneous 
demand) 2 


In Brazil 
(other) 


Abroad 


Undergraduate 


889 3 


n.a. 4 


n.a. 


Graduate, nondegree 


n.a. 


II 3 


82 3 




10,307 


1,517 


64 


Doctoral (Ph.D.) degree 


3,596 


2,895 


958 




n.a. 


n.a. 


67 


"Sandwich" 5 programs, M.Aand Ph.D. 








levels 


n.a. 


n.a. 


104 


For retired professors 


289 3 


n.a. 


n.a. 


Other 


n.a. 


n.a. 


103 3 


TOTAL 


12,042 


3,395 


1,756 



1 Coordenacao Fundacao de Aperfeicoamento de Pessoal de Nivel Superior (CAPES). 

2 "Spontaneous demand" refers to grants given to people who apply individually, as opposed to grants given to insti- 
tutions and agency projects. For example, CAPES has a fellowship program designed for teachers in the federal 
universities, but the program also accepts applicants from the general public. 

5 Figures for 1991. 

4 n.a. — not available. 

5 "Sandwich" fellowships are those given for students in graduate programs in Brazil to spend a year or similar 
period in a foreign institution. 

Source: Based on information from Coordenacao para o Aperfeicoamento de Pessoal 
de Nivel Superior (CAPES), Relatorio de atividades [Sao Paulo] , 1990 and 1991; 
and Fundacao Coordenacao de Aperfeicoamento de Pessoal de Nivel Supe- 
rior, Relatorio de atividades [Sao Paulo] , 1997. 



505 



Brazil: A Country Study 



Table 35. Budget of the National Council for Scientific and 
Technological Development by Main Line of Activity, 1980-95 
(in millions of United States dollars) 

Year Fellowships Grants 1 Institutes Administration Other 2 Total 



1980 .... 


43.5 


23.8 


27.0 


41.8 


4.4 


140.5 


1981 .... 


50.0 


23.5 


31.8 


44.9 


2.6 


152.8 


1982 .... 


75.8 


39.8 


36.1 


36.7 


2.4 


190.8 


1983 .... 


78.5 


32.4 


31.0 


33.1 


3.7 


178.7 


1984 .... 


75.1 


26.5 


28.3 


33.9 


6.2 


169.9 


1985 .... 


100.7 


47.6 


37.9 


38.4 


6.0 


230.5 


1986 .... 


105.1 


56.7 


39.4 


31.0 


8.4 


240.6 


1987 .... 


216.9 


57.6 


68.0 


75.1 


5.2 


422.8 


1988 .... 


302.2 


59.1 


62.6 


60.0 


5.6 


489.5 


1989 .... 


303.5 


43.2 


109.9 


62.5 


29.2 


547.9 


1990 .... 


242.7 


56.7 


69.3 


49.7 


20.2 


438.6 


1991 .... 


311.5 


26.6 


41.3 


35.3 


20.0 


434.7 


1992 .... 


259.6 


10.2 


41.1 


23.3 


14.2 


348.4 


1993 .... 


347.6 


41.3 


49.9 


30.6 


14.3 


483.7 


1994 .... 


459.7 


19.9 


48.4 


28.8 


27.0 


583.8 


1995 .... 


498.2 


34.6 


88.1 


38.5 


21.0 


687.7 



Includes special projects. 

Includes debt-service payments, fringe benefits to employees (for food, nursery, and transportation) , and persons 
working for other government agencies. 



Source: Based on information from Brazil, Ministry of Science and Technology, 
Relatorio de atividades [Brasilia], 1995, 169, 172-73. 



506 



Appendix 



Table 36. Expenditures for Science and Technology in the State of Sao 

Paulo, 1996 



Institution 



Expenditures (in Brazilian reats (R&)) 



l 



DCET/Funcet 2 
FAPESP 3 



230,667 



500 



Universities 

University of Sao Paulo 4 . . . 
Campinas State University 5 
Unesp 6 



767,488 
338,176 
363,072 



Institutes 



IPT 7 



42,398 



1 For value — see Glossary. 

2 Departamento de Ciencia e Tecnologia (Department of Science and Technology) /Fundo Estadual de Desenvolvi- 
mento Cientifico e Tecnologico (State Foundation for Scientific and Technological Development). 

3 Fundacao de Apoio a Pesquisa de Estado de Sao Paulo (Sao Paulo Federation to Support Research). 

4 Universidade de Sao Paulo (USP). 

5 Universidade Estadual de Campinas. 

6 Universidade Estadual Paulista (Sao Paulo State University). 

7 Instituto de Pesquisas Tecnologicas (Institute for Technological Research). 



Source: Based on information from Sao Paulo Federation to Support Research 
(Fundacao de Apoio a Pesquisa de Sao Paulo — FAPESP) and Sao Paulo State 
Secretary of Science, Technology, and Economic Development, 1997. 



507 



Brazil: A Country Study 



Table 37. Education Obtained by the Higher Education Professorate, 

1983 
(in percentages) 

y , ctj, Federal State Municipal Private _ . 

Level of Education T ... T . . T . Total 

Institutions Institutions Insututions Insututions 

No undergrad- 
uate degree .. . 0.28 0.06 0.13 0.15 0.17 1 

Undergrad- 
uate 19.29 21.41 18.09 26.87 23.1 1 1 

Specialization . . . 31.32 33.03 63.95 49.65 41.50 1 

Master's (M.A.) 

degree 30.43 19.18 13.88 17.1 21.53 1 

Doctoral (Ph.D.) 

degree 18.68 26.31 3.95 6.24 13.69 1 

Number of indi- 
viduals 48,959 28,248 6,843 71,726 155,776 

M.A. degrees 

granted 56.7 31.2 n.a. 2 12.1 100.0 

Ph.D. degrees 

granted 35.6 57.9 n.a 6.4 100.0 

1 As given. Figures do not appear to be totals. 

2 n.a. — not available. 

Source: Based on information from Brazil, Ministerio da Educacao, Servico de Estatis- 
tica da Educacao e Cultura (SSEC), Brasilia, 1997; and Brazil, Ministerio da 
Educacao, Council for Advanced Professional Training (Conselho para o 
Aperfeicoamento de Pessoal de Nfvel Superior — CAPES) , Brasilia. 



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Chapter 4 

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(Various issues of the following publications were also used 
in the preparation of this chapter: Financial Times [London] 
and New York Times. ) 



606 



Glossary 



adelantado — In the sixteenth century, the Spanish crown 
awarded the office of adelantado to selected individuals 
who, at their own expense, undertook the discovery and 
conquest of new overseas territories. Adelantados served as 
executive officers to govern a region, to act as head of mil- 
itary forces at distant frontier posts, or to command a mili- 
tary expedition. 

Alliance for Progress — Established in 1961 at a hemispheric 
meeting in Punta del Este, Uruguay, under the leadership 
of President John F. Kennedy as a long-range program to 
help develop and modernize Latin American states 
through multisector reforms, particularly in health and 
education. Involved various forms of foreign aid, includ- 
ing development loans offered at very low or zero interest 
rates, from the United States to all states of Latin America 
and the Caribbean, except Cuba. 

Andean Group — An economic group, the Andean Common 
Market, created in 1969 by Bolivia, Chile, Colombia, Ecua- 
dor, Peru, and Venezuela as a subregional market to 
improve its members' bargaining power within the Latin 
American Free Trade Association (LAFTA) and to encour- 
age increased trade and more rapid development. LAFTA, 
which dated from 1960, was replaced in 1980 by the Latin 
American Integration Association (Asociacion Lati- 
noamericana de Integration — ALADI), which advocated a 
regional tariff preference for goods originating in member 
states. Chile left the Andean Group in 1976. The threat 
that Peru might withdraw from the pact had receded by 
August 1992. 

audiencia — A high court of justice, exercising some administra- 
tive and executive functions in the colonial period. 

balance of payments — An annual statistical summary of the 
monetary value of all economic transactions between one 
country and the rest of the world, including goods, ser- 
vices, income on investments, and other financial matters, 
such as credits or loans. 

bandeirantes — Colonial Portuguese expeditions made up of 
adventurers, named after the Portuguese word for flag 
(bandeira) because they traveled under the bandeira of 



607 



Brazil: A Country Study 

their leader, who took with him kin, friends, slaves, and 
friendly Amerindians. 

campesino — A Latin American Indian farmer or farm laborer. 

capital goods — A factor of production category consisting of 
manufactured products used in the process of production. 

Carta di Lavoro — This electoral model involves "functional rep- 
resentation" by corporate groups; that is, instead of having 
direct elections for the national legislature by districts or 
by proportional representation, elections are indirect 
within corporate management and labor unions. 

central bank — Usually a federal government-related institution 
that is entrusted with control of the commercial banking 
system and with the issuance of the currency. Responsible 
for setting the level of credit and money supply in an econ- 
omy and serving as the banker of last resort for other 
banks. Also has a major impact on interest rates, inflation, 
and economic output. 

clientelism — Personal relationships that link patrons and cli- 
ents together in a system in which jobs, favors, and protec- 
tion are exchanged for labor, support, and loyalty. 

"coattails" — The process whereby presidential candidates trans- 
fer votes and "pull in" candidates of the same party or coa- 
lition who are running for governor, senator, and so forth. 
Thus, "reverse coattails" occurs when candidates for gover- 
nor, senator, and so forth transfer votes and "pull in" their 
respective candidates for president. 

Common Market of the South (Mercado Comum do Sul — Mer- 
cosul) — An organization established on March 26, 1991, 
when the Treaty of Asuncion was signed by Argentina, Bra- 
zil, Paraguay, and Uruguay for the purpose of promoting 
regional economic cooperation. Chile was conspicuously 
absent because of its insistence that the other four coun- 
tries first had to lower their tariffs to the Chilean level 
before Chile could join. Mercosul became operational on 
January 1, 1995. Chile became an associate member that 
month and agreed to join as a full member on June 25, 
1996. Bolivia was admitted into Mercosul in March 1997. 
Mercosul is more commonly known by its Spanish acro- 
nym, Mercosur (Common Market of the South — Mercado 
Comun del Sur). 

comparative advantages — The relative efficiencies with which 
countries can produce a product or service. 

consumer durables — Consumer items or durable goods (q.v.) 



608 



Glossary 

used for several years, such as automobiles, appliances, or 
furniture. 

consumer price index (CPI) — A statistical measure of sustained 
change in the price level weighted according to spending 
patterns. 

Contadora Support Group — A diplomatic initiative launched 
by a January 1983 meeting on Contadora Island off the 
Pacific coast of Panama, by which the "Core Four" media- 
tor countries of Colombia, Mexico, Panama, and Venezu- 
ela sought to prevent through negotiations a regional 
conflagration among the Central American states of Costa 
Rica, El Salvador, Guatemala, Honduras, and Nicaragua. 
The governments of Argentina, Brazil, Peru, and Uruguay 
formed the Contadora Support Group in 1985 in an effort 
to revitalize the faltering talks. The Contadora process was 
effectively superseded by direct negotiations among the 
Central American states. 

coronelismo — Derives from the honorary title of colonel (coronel; 
pi., coroneis) in the National Guard that was customarily 
conferred on a locally dominant political boss, usually a 
substantial landowner or local justice of the peace. The 
term eventually became applied to local strongmen or 
political bosses, especially in rural areas and particularly in 
poorer Northeastern states. Coronelismo thus was a classic 
boss system under which control of patronage and minor 
funds was centralized in the coronel, who would dispense 
favors in return for political loyalty. 

corporatism — The belief that society was, as political scientist 
Philippe C. Schmitter stated, made up of "a natural hierar- 
chy of social groups, each with its ordained place and its 
own set of perquisite responsibilities." As a sociopolitical 
philosophy, corporatism found its most developed expres- 
sion in Italy under Benito Mussolini. Corporatism is anti- 
thetical to both Marxist and liberal democratic political 
ideals. A corporatist would organize society into industrial 
and professional corporations that serve as organs of polit- 
ical representation within a hierarchical, centralized polity 
controlled by the state. A corporatist society is elitist, patri- 
monial, authoritarian, and statist. Some social science the- 
orists have argued that Latin political tradition has had a 
fundamental corporatist feature, but others argue that it is 
but one of many cultural influences in the region. 

cruzado — On February 28, 1986, the Brazilian cruzado, equal 



609 



Brazil: A Country Study 

to 1,000 cruzeiros, was introduced, and the Cruzado Plan 
to fight inflation was announced. The new cruzado 
(cruzado novo), equal to 1,000 old cruzados, was intro- 
duced on January 15, 1989. 

cruzeiro (Cr$) — The old national currency, consisting of 100 
centavos, which replaced the mil-reis on November 1, 
1942. The cruzeiro novo was created on February 8, 1967, 
to replace the cruzeiro. After August 1968, the cruzeiro 
novo was adjusted by small amounts at frequent intervals, 
often every week or two. On May 15, 1970, the currency 
reverted to the cruzeiro, which remained in effect until 
1986 when it was replaced by the cruzado (q.v.). The 
cruzeiro was reinstituted on March 16, 1990. 

cruzeiro real (CR$) — On August 1, 1993, the cruzeiro real, 
equal to 1,000 cruzeiros, was introduced, as the national 
currency. It was replaced on July 1, 1994, by the real {q.v.). 

current account — Current account balance is the difference 
between (a) exports of goods and services as well as 
inflows of unrequited transfers but exclusive of foreign aid 
. and (b) imports of goods and services as well as all unre- 
quited transfers to the rest of the world. 

debt service — Cash requirement to meet annual interest and 
principal repayment obligations on total external debt. 

degredados — Usually refers to minor Portuguese criminals 
exiled to Brazil in the sixteenth century as their punish- 
ment. 

dependency theory — A theory that seeks to explain the con- 
tinuing problems of Latin American underdevelopment 
and political conflict by positing the existence of an impe- 
rialistic, exploitative relationship between the industrial- 
ized countries and the developing nations of Latin 
America and other developing regions. 

d'Hondt method — Also known as the highest-average method 
of determining the allocation of seats to political parties 
after an election. It was devised by the Belgian Victor 
d'Hondt to be used in electoral systems based on propor- 
tional representation. In addition to Portugal, the method 
has been adopted by Austria, Belgium, Finland, and Swit- 
zerland. Under this method, voters do not choose a candi- 
date but vote for a party, each of which has published a list 
of candidates. The party winning the most votes in a con- 
stituency is awarded the area's first seat, which goes to the 
candidate at the top of the winning party's list. The total 



610 



Glossary 

vote of this party is then divided by two, and this amount is 
compared with the totals of other parties. The party with 
the greatest number of votes at this point receives the next 
seat to be awarded. Each time a party wins a seat, its total is 
divided by the number of seats it has won plus one. This 
process continues until all the seats in a constituency are 
awarded. The d'Hondt method slightly favors large parties. 
Because there is no minimum threshold for winning a 
seat, however, small parties can also elect representatives. 

durable goods — Goods or consumer durables (q.v.) that have a 
life extending more than three years, such as automobiles, 
appliances, and manufacturing equipment. 

Ecclesiastical Base Communities (Comunidades Eclesiais de 
Base — CEBs) — Grassroots groups consisting of mostly 
poor Christian lay people through which advocates of lib- 
eration theology (q.v.) mainly work. Members of CEBs 
meet in small groups to reflect on scripture and discuss its 
meaning in their lives. They are introduced to a radical 
interpretation of the Bible, one employing Marxist termi- 
nology to analyze and condemn the wide disparities 
between the wealthy elite and the impoverished masses in 
most underdeveloped countries. This reflection often 
leads members to organize and improve their living stan- 
dards through cooperatives and civic-improvement 
projects. 

Economic Commission for Latin America and the Caribbean 
(ECLAC) — A United Nations regional economic commis- 
sion established on February 25, 1948, as the Economic 
Commission for Latin America (ECLA). More commonly 
known in Latin America as Comision Economica para 
America Latina (CEPAL). In 1984 ECLAC expanded its 
operations and title to include the Caribbean. Main func- 
tions are to initiate and coordinate policies aimed at pro- 
moting economic development. In addition to the 
countries of Latin America and the Caribbean, ECLAC's 
forty-one members include Britain, Canada, France, the 
Netherlands, Portugal, Spain, and the United States. 
There are an additional five Caribbean associate members. 

elasticity — Usually refers to price elasticity, the ratio of the 
responsiveness of quantity demanded, or supplied, to a 
change in price. 

European Community (EC — also commonly called the Com- 
munity) — Established on April 8, 1965, the EC comprised 



611 



Brazil: A Country Study 

three communities: the European Coal and Steel Commu- 
nity (ECSC), the European Economic Community (EEC), 
and the European Atomic Energy Community (Euratom). 
Each community was a legally distinct body, but from 1967 
the communities shared common governing institutions. 
The EC formed more than a framework for free trade and 
economic cooperation; the signatories to the treaties gov- 
erning the communities agreed in principle to integrate 
their economies and ultimately to form a political union. 
Belgium, France, Italy, Luxembourg, the Netherlands, and 
the Federal Republic of Germany (West Germany) were 
charter members of the EC. Britain, Denmark, and Ire- 
land joined on January 1, 1973; Greece became a member 
on January 1, 1981; and Portugal and Spain entered on 
January 1, 1986. In November 1993, the EC was subsumed 
under a new organization, the European Union (EU — 
q.u). 

European Economic Community (EEC) — SeeEC. 

European Union (EU) — Successor organization to the Euro- 
pean Community (EC — q.v.), officially established on 
November 1, 1993, when the Treaty on European Union 
went into effect. The goal of the EU is a closer economic 
union of its member states and the European Monetary 
Union, a greater unity in matters of justice and domestic 
affairs, and the development of a common foreign and 
security policy. To the members of the EC, the EU added 
Austria, Finland, and Sweden, effective January 1, 1995. 

export-led growth — An economic development strategy that 
emphasizes export promotion as the engine of economic 
growth. Proponents of this strategy emphasize the correla- 
tion between growth in exports and growth in the aggre- 
gate economy. 

extreme poverty — Those who live below the poverty line, 
defined as half or less of the family income needed for a 
minimal level of food and shelter. 

factors of production — Land (or natural resources), labor, cap- 
ital goods, sometimes entrepreneurship, and other 
resources used in the production of goods and services. 

fiscal year (FY) — Coincides with calendar year. 

General Agreement on Tariffs and Trade (GATT) — A 123- 
member international organization created on October 
30, 1947, to provide a continuing basis for nations to nego- 
tiate and regulate commercial policies and promote inter- 



612 



Glossary 



national trade on a nondiscriminatory basis. Principal 
activity multinational negotiation for tariff reductions. Sev- 
enth and last round of negotiations, held on April 15, 
1994, was Uruguay Round, with the aim of liberalizing the 
world market and promoting intellectual property. GATT 
was subsumed by World Trade Organization (WTO) on 
January 1, 1995. 

general price index (GPI) — A statistical measure of sustained 
change in the price level (rate of inflation) weighted 
according to spending patterns. 

Gini index or coefficient — A measure of inequality in a coun- 
try's wealth distribution. It contrasts actual income and 
property distribution with perfectly equal distribution. 
The value of the coefficient, or index, can vary from 
(complete equality) to 1 (complete inequality). Brazil's 
Gini index in 1991 was 0.6366. 

gross domestic product (GDP) — The broadest measure of the 
total value of goods and services produced by the domestic 
economy during a given period, usually a year. GDP has 
mainly displaced a similar measurement, the gross 
national product (GNP — q.u). GDP is obtained by adding 
the value contributed by each sector of the economy in the 
form of profits, compensation to employees, and deprecia- 
tion (consumption of capital). The income arising from 
investments and possessions owned abroad is not 
included, hence the use of the word "domestic" to distin- 
guish GDP from GNP. Real GDP adjusts the value of GDP 
to exclude the effects of price changes, allowing for mea- 
surement of actual yearly increases or decreases in output. 
Real GDP is the value of GDP when inflation has been 
taken into account. 

gross national product (GNP) — Total market value of all final 
goods (those sold to the final user) and services produced 
by an economy during a year, plus the value of any net 
changes in inventories. Measured by adding the gross 
domestic product (GDP — q.v.), net changes in inventories, 
and the income received from abroad by residents less pay- 
ments remitted abroad to nonresidents. Real GNP is the 
value of GNP when inflation has been taken into account. 

Henriques — Militia units named after Henrique Dias, a black 
Brazilian guerrilla leader who led black troops against the 
Dutch in Pernambuco in the 1640s. 

human development index (HDI) — A measurement of human 



613 



Brazil: A Country Study 

progress introduced by the United Nations Development 
Programme (UNDP) in its Human Development Report 1990. 
By combining indicators of real purchasing power, educa- 
tion, and health, the HDI provides a more comprehensive 
measure of development than does the GNP (q.v.) alone. 

import-substitution industrialization — An economic develop- 
ment strategy and a form of protectionism that emphasizes 
the growth of domestic industries by restricting the impor- 
tation of specific manufactured goods, often by using tariff 
{q.v.) and non tariff measures, such as import quotas. The- 
oretically, capital would thus be generated through savings 
of foreign-exchange earnings. Proponents favor the 
export of industrial goods over primary products and for- 
eign-exchange considerations. In the post-World War II 
period, import-substitution industrialization was most 
prevalent in Latin America. Its chief ideological propo- 
nents were the Argentine economist Raul Prebisch and the 
Economic Commission for Latin America (q.v.). Main 
weaknesses in Latin America: the domestic markets in the 
region were generally too small; goods manufactured 
domestically were too costly and noncompetitive in the 
world market; most states in the region had an insufficient 
variety of resources to build a domestic industry; and most 
were also too dependent on foreign technology. 

indexation — Automatic adjustment of remuneration in accor- 
dance with changes in a specific price index. 

informal economy — Unofficial or underground sector of eco- 
nomic activity beyond government regulation and taxa- 
tion, to include street vendors, some domestic servants, 
and unskilled workers in urban areas. 

Inter-American Development Bank (IADB) — Also known as 
Banco Interamericano de Desarrollo (BID). A forty-six- 
member bank established on December 30, 1959, to pro- 
mote economic and social development in Latin America. 

Inter-American Treaty of Reciprocal Assistance of 1947. See Rio 
Treaty. 

intermediate goods — Goods purchased for resale or for use in 
producing final goods for consumers, or inventories con- 
sisting of raw materials, semifinished goods, and finished 
goods not yet sold to the final consumer. The gross 
national product (q.v.) does not include sales of interme- 
diate goods or services. 

International Bank for Reconstruction and Development 



614 



Glossary 

(IBRD) — Formal name for the World Bank Group (q.v.) 
which was conceived at the Bretton Woods Conference on 
July 22, 1944, and began operations in June 1946. Its pri- 
mary purpose is to provide technical assistance and loans 
at market-related rates of interest to developing countries 
at more advanced stages of development. 

International Monetary Fund (IMF) — Established on Decem- 
ber 27, 1945, the IMF began operating on March 1, 1947. 
The IMF is a specialized agency affiliated with the United 
Nations that takes responsibility for stabilizing interna- 
tional exchange rates and payments. The IMF's main busi- 
ness is the provision of loans to its members when they 
experience balance of payments difficulties. These loans 
often carry conditions that require substantial internal 
economic adjustments by the recipients. The IMF's capital 
resources comprise Special Drawing Rights (a new form of 
international reserve assets) and currencies that the mem- 
bers pay under quotas calculated for them when they join. 
These resources are supplemented by borrowing. In 1995 
the IMF had 179 members. 

international reserves — Some reserves, in the form of gold, 
currencies of other countries, and Special Drawing Rights, 
that every country holds to serve as "international money" 
when a nation faces balance of payments (q.v.) difficulties. 

International Telecommunications Satellite Organization 
(Intelsat) — Created in 1964 under a multilateral agree- 
ment, Intelsat is a nonprofit cooperative of 134 countries 
that jointly own and operate a global communications sat- 
ellite system. 

Kardecian spiritualism — Allen Kardec (a pseudonym) founded 
Kardecism, a spiritualist religion, in mid-nineteenth-cen- 
tury France. Imported into Brazil at the end of the nine- 
teenth century, the religion was adopted by members of 
Brazil's upper classes eager to identify with French culture. 
It centers on seances in which the dead return through 
mediums and give the living advice. 

Latin American Free Trade Association (LAFTA) — A regional 
group founded by the Montevideo Treaty of 1960 to 
increase trade and foster development. LAFTA's failure to 
make meaningful progress in liberalizing trade among its 
members or to move toward more extensive integration 
prompted the leaders of five Andean states to meet in 
Bogota in 1966. This meeting led to the creation in 1969 



615 



Brazil: A Country Study 

of the Andean Group (q.v.) — consisting of Bolivia, Chile, 
Colombia, Ecuador, Peru, and Venezuela — to serve as a 
subregional structure within LAFTA. LAFTA was replaced 
in 1980 by the Latin American Integration Association 
(Asociacion Latinoamericana de Integration — ALADI), 
which advocated a regional tariff preference for goods 
originating in member states. ALADI has since declined as 
a major Latin American integration effort in favor of 
regional efforts, such as the Common Market of the South 
(q.v.). 

League of Nations — An international organization whose cove- 
nant arose out of the Paris Peace Conference in 1919. It 
was created for the purpose of preserving international 
peace and security and promoting disarmament by obli- 
gating nations to submit their conflicts to arbitration, judi- 
cial settlement, or to the League Council for consid- 
eration. By not signing the Treaty of Versailles, the United 
States refused to join. Although the fifty-three-member 
body considered sixty-six disputes and conflicts between 
1920 and 1939, it proved ineffective against German, Ital- 
ian, Japanese, and Soviet aggression in the 1930s. Formally 
disbanded in April 1946, its functions were transferred to 
the United Nations. 

liberation theology — An activist movement led by Roman Cath- 
olic clergy who trace their inspiration to Vatican Council II 
(1965), when some church procedures were liberalized, 
and the Latin American Bishops' Conference in Medellin, 
Colombia (1968), which endorsed greater direct efforts to 
improve the lot of the poor. Advocates of liberation theol- 
ogy — sometimes referred to as "liberationists" — work 
mainly through Ecclesiastical Base Communities (q.v.). 

marginality — A concept used to explain the poor political, eco- 
nomic, and social conditions of individuals within a soci- 
ety, social classes within a nation, or nations within the 
larger world community. Refers often to poverty-stricken 
groups left behind in the modernization process. They are 
not integrated into the socioeconomic system, and their 
relative poverty increases. Marginality is sometimes 
referred to as dualism or the dual-society thesis. 

Mercosul — See Common Market of the South. 

mestizo (mestizo) or mameluco — Person of mixed racial origin. 

Missile Technology Control Regime (MTCR) — A twenty-five- 
member organization established in April 1987 to counter 



616 



Gbssary 

missile proliferation by controlling the export of key mis- 
sile technologies and equipment. 

moderating power (poder moderador) — The constitutional func- 
tion of the emperor during Brazil's monarchy era to over- 
see or moderate the political system by intervening at 
times of political crisis or institutional deadlock. From the 
fall of the monarchy in 1889 to the 1964 military coup, the 
military assumed and delegated the moderating power on 
an extra-legal basis. Political scientist Alfred A. Stepan uses 
the term to describe the moderator model of civil-military 
relations in the sense of "arbiter." 

monetarists — Advocates of monetarism, an economic policy 
based on the control of a country's money supply. Mone- 
tarists assume that the quantity of money in an economy 
determines its economic activity, particularly its rate of 
inflation. A rapid increase in the money supply creates ris- 
ing prices, resulting in inflation. To curb inflationary pres- 
sures, governments need to reduce the supply of money 
and raise interest rates. Monetarists believe that conserva- 
tive monetary policies, by controlling inflation, will 
increase export earnings and encourage foreign and 
domestic investments. Monetarists generally have sought 
support for their policies from the International Monetary 
Fund (q.v.), the World Bank Group (q.v.), and private 
enterprise, especially multinational corporations. 

nonparticipatory methodology — Unlike the "start from 
scratch" methodology used in 1987-88 (involving twenty- 
four subcommittees, eight committees, including a draft- 
ing committee, two rounds of floor votes, and extensive 
popular hearings in the committee stages), the nonpartici- 
patory methodology in the constitutional revision made in 
1993-94 was very streamlined, with no hearings or com- 
mittees. It involved only the reporter's reports article by 
article, including or excluding the proposed changes, and 
then a floor vote. 

North American Free Trade Agreement (NAFTA) — A free- 
trade agreement comprising Canada, Mexico, and the 
United States. NAFTA was approved by the United States 
House of Representatives in November 1993. NAFTA 
exceeds 360 million consumers, whose countries have a 
combined output of US$6 trillion. 

Organization of American States (OAS) — Established by the 
Ninth International Conference of American States held 



617 



Brazil: A Country Study 

in Bogota on April 30, 1948, and effective since December 
13, 1951. Has served as a major inter-American organiza- 
tion to promote regional peace and security as well as eco- 
nomic and social development in Latin America. 
Composed of thirty-five members, including most Latin 
American states and the United States and Canada. Deter- 
mines common political, defense, economic, and social 
policies and provides for coordination of various inter- 
American agencies. Responsible for implementing the 
Inter-American Treaty of Reciprocal Assistance (Rio 
Treaty) (q.v.), when any threat to the security of the region 
arises. 

personalism — The dominance of a charismatic personality in 
the political life of a nation. Loyalty is to a political leader 
rather than to institutions, organizations, or ideals. 

plebiscite — A device of direct democracy whereby the elector- 
ate can pronounce, usually for or against, some measure 
put before it by a government. Also known as a referen- 
dum. 

political culture — The orientation of the citizens of a nation 
toward politics, and their perceptions of political legiti- 
macy and the traditions of political practice. 

"popular" sectors — A term similar to popular culture, referring 
to the masses of working-class, underemployed, and unem- 
ployed citizens. 

positivism — The theory that genuine knowledge is acquired by 
science and that metaphysical speculation has no validity. 
Positivism, based largely on the ideas of the French philos- 
opher Auguste Comte, was adopted by many Latin Ameri- 
can intellectuals in the late nineteenth and early twentieth 
centuries. 

primary goods or products — Raw materials, such as ores, logs, 
and agricultural products, or other products with a high 
content of natural resources. 

primary sector — Agriculture, extractive activities, and fishing. 

real (pi., reais; R$) — On July 1, 1994, Brazil's sixth currency in 
nine years, the dollar-linked real (pronounced hay-OW), 
equal to 2,750 cruzeiro reais, replaced the cruzeiro real 
(CR$ — q.v.). During the transition from the cruzeiro real 
to the real, Real Value Units (Unidades Reais de Valor — 
URVs) acted as a temporary currency, beginning on 
March 1, 1994, with one URV equal to one real or 
CR$2,750. URVs began gradually replacing indexes used 



618 



Glossary 



to adjust wages, prices, taxes, contracts, and interest and 
utility rates. The URV was also part of an economic stabili- 
zation plan, the RealVhin (Piano Real), under which prices 
were gradually converted from cruzeiro reals to URVs. The 
URV is, by definition, the inflation rate itself. The URV 
rate is calculated as the average of a basket ( cesta) of price 
indexes. The fluctuation band mechanism set by the Cen- 
tral Bank (q.v.) in March 1995 provided for bank interven- 
tion in the interbank exchange markets whenever the 
buying floor rate of R$0.88 per dollar and the ceiling sell- 
ing rate of R$0.93 per dollar were affected by the market 
rates. The Central Bank restructured the real's trading ban 
on January 15, 1997, to a range of 1.0430 to 1.0480 per 
dollar, after the currency fell through its previous band. 
The dollar /r^Z rate on April 13, 1998, was R$1.140. 

real exchange rate — The value of foreign exchange corrected 
for differences between external and domestic inflation. 

Rio Treaty (Inter-American Treaty of Reciprocal Assistance) — 
A regional alliance, signed in Rio de Janeiro in 1947, that 
established a mutual security system to safeguard the West- 
ern Hemisphere from aggression from within or outside 
the zone. Signatories include the United States and twenty 
Latin American republics. In 1975 a special conference 
approved, over United States objections, a Protocol of 
Amendment to the Rio Treaty that, once ratified, would 
establish the principle of "ideological pluralism" and 
would simplify the rescinding of sanctions imposed on an 
aggressor party. 

slash-and-burn agriculture — Method of cultivation whereby 
areas of the forest are burned and cleared for planting, the 
ash providing some fertilization. Area is cultivated for sev- 
eral years and then left fallow for a decade or longer. 
These practices by subsistence farmers could destroy 
almost half of world's remaining 2.08 billion hectares of 
tropical forests, according to a study released by Consulta- 
tive Group on International Agricultural Research 
(CGIAR) in August 1996. 

structuralists — Advocates of structuralism, an economic policy 
that blames chronic inflation primarily on foreign trade 
dependency, insufficient local production, especially in 
agriculture, and political struggles among entrenched 
vested interests over government contracts. Structuralists 
advocate encouraging economic development and mod- 



619 



Brazil: A Country Study 

ernization through Keynesian and neo-Keynesian policies 
of governmental stimulative actions, accompanied by orga- 
nizational reforms. Structuralists contend that monetarist 
(q.v.) policies retard growth and support the status quo. 

sustainable development — Development that meets the needs 
of the present generation without compromising the abil- 
ity of future generations to meet their own. 

tariff — A tax levied by a government in accordance with its tar- 
iff schedule, usually on imported products, but sometimes 
also on exported goods. May be imposed to protect 
domestic industries from competitive imported goods 
and/or to generate revenue. Types include ad valorem, 
variable, or some combination. 

tenentismo — A reform movement among junior army officers 
that began in the early 1920s and played a significant role 
in bringing Getulio Dorneles Vargas (president, 1930-45, 
1951-54) to power. 

terms of trade — The ratio of a country's index of average 
export prices and average import prices. In international 
economics, the concept of "terms of trade" plays an impor- 
tant role in evaluating exchange relationships between 
nations. The terms of trade shift whenever a country's 
exports will buy more or fewer imports. An improvement 
in the terms of trade occurs when export prices rise rela- 
tive to import prices. The terms of trade turn unfavorable 
in the event of a slump in export prices relative to import 
prices. 

Third Worldism — An ideology that began in 1947 in which 
mostly developing nations not committed to either the 
East or the West in the Cold War professed policies of 
"neutralism" and "nonalignment." Since the 1970s, Latin 
American states have moved increasingly from a position 
of political and economic alignment with the United 
States to one of sympathy with Third Worldism. 

Treaty of Tlatelolco — On being ratified by Cuba in April 1995, 
the treaty took effect, binding the thirty-three Latin Amer- 
ican and Caribbean signatory nations to the peaceful use 
of nuclear power. Under the treaty, Latin America became 
the world's first region to prohibit nuclear weapons. The 
treaty covers all of Latin America, including the Carib- 
bean, from the Mexican border with the United States to 
Antarctica. It bans the testing, use, manufacture, produc- 
tion, or acquisition of nuclear weapons. Each participating 



620 



Glossary 

country must negotiate accords with the International 
Atomic Energy Agency (IAEA) to facilitate verification. 

Treaty of Tordesillas — Under a papal bull issued in 1493, Spain 
was awarded lands west and south of the line of demarca- 
tion, and Portugal received lands east and south. Dissatis- 
fied with this arrangement, however, Portugal and Spain 
concluded the Treaty of Tordesillas of June 4, 1494, to 
establish a new line of demarcation 370 leagues west of the 
Cape Verde Islands, placing all of Africa, India, and later, 
Brazil, within Portugal's sphere. 

United Nations Development Programme (UNDP) — A thirty- 
six-member organization, established on November 22, 
1965, to provide technical assistance to stimulate eco- 
nomic and social development. 

value-added tax (VAT) — An incremental tax applied to the 
value added at each stage of the processing of a raw mate- 
rial or the production and distribution of a commodity. It 
is calculated as the difference between the product value 
at a given stage and the cost of all materials and services 
purchased as inputs. The value-added tax is a form of indi- 
rect taxation, and its impact on the ultimate consumer is 
the same as that of a sales tax. 

vertical integration — Merging into a single ownership of firms 
producing in successive stages of a production process, 
whether it be forward toward the finished goods market or 
backward toward raw material producers. 

World Bank — Informal name used to designate the World 
Bank Group of four affiliated international institutions: 
the International Bank for Reconstruction and Develop- 
ment (IBRD — q.v.), the International Development Associ- 
ation (IDA), the International Finance Corporation (IFC), 
and the Multilateral Investment Guarantee Agency 
(MIGA). The IBRD, established in 1945, has the primary 
purpose of providing loans to developing countries for 
productive projects. The IDA, a legally separate loan fund 
administered by the staff of the IBRD, was established in 
1960 to furnish credits to the poorest developing countries 
on much easier terms than those of conventional IBRD 
loans. The IFC, founded in 1956, supplements the activi- 
ties of the IBRD through loans and assistance designed 
specifically to encourage the growth of productive private 
enterprises in less developed countries. MIGA, founded in 
1988, insures private foreign investment in developing 



621 



Brazil: A Country Study 



countries against various noncommercial risks. The presi- 
dent and certain senior officers of the IBRD hold the same 
positions in the IFC. The four institutions are owned by 
the governments of the countries that subscribe their capi- 
tal. To participate in the World Bank Group, member 
states must first belong to the IMF (q.v.). In 1995 the 
World Bank included 178 member-countries. By the early 
1990s, the Latin American and Caribbean region had 
received more loan aid through the World Bank Group 
than any other region, 
yellow cake — The U308 uranium concentrate used by nuclear 
power plants in Angra dos Reis in Rio de Janeiro State. It is 
a radioactive substance made from a low-grade uranium 
ore. 



622 



Index 



abertura, 82 
abortion, 113 
Abrams tank, 318 
Abril, Editora, 207 
Abrolhos, 91 

Acailandia: and railroad transportation, 
205 

acculturation, 125 
Acegua, 202 

acquired immune deficiency syndrome 

(AIDS), 138,309 
Acre (state), 99; Amerindian population 

in, 126 

Adaptation and Instruction Center 
(Centro de Instrucao e Adaptacao), 
393 

adelantado, 15 

Administrative Department of Public 
Service (Departamento Administra- 
tive do Servico Publico— DASP) , 264 

advertising, lv 

Aeronautical Technology Institute (Insti- 
tuto Tecnologico da Aeronautica — 
ITA),363, 392,393, 423 

Aeronautics Specialists School (Escola 
de Especialistas de Aeronautica) , 393 

Aerospace Technical Center (Centro 
Tecnico Aeroespacial — CTA) , 363, 
393, 423, 437, 449 

Africa: Brazil's relations with, 319-22 

African Development Bank (ADB): Bra- 
zil's participation in, 315, 319 

Afro-Brazilian religious syncretism, 127 

age: of Brazilian population, 110; and lit- 
eracy, 146 

Agenda 21 (plan), 107 

Agrarian Reform, Special Ministry of, 
lxxii 

Agreement on the Exclusively Peaceful 

Use of Nuclear Energy, 450 
agreste, 101 

agribusiness complexes: expansion of, 
190 

agriculture: applied science in, 418-19; 
and environment, 104; growth of, 183; 



mechanization of, 6; production in, 
187-90; science and technology in, 
426; share of, in total employment, 
181; slash-and-burn techniques in, 
104; soils in, 95-97; in South, 103; veg- 
etation in, 95-97 

Agronomic Institute of Campinas (Insti- 
tuto Agronomico de Campinas), 418 

Agulhas Negras Military Academy (Aca- 
demia Militar das Agulhas Negras — 
AMAN),389, 395-96, 397 

Aimore people, 17 

Air Cadets' Preparatory School (Escola 

Preparatoria de Cadetes do Ar — 

EPCAr), 393 
air force, 335-36, 384, 423; aerospace 

programs of, 454; judges in, 275; size 

of, 336 

Air Force Academy (Academia da Forca 

Aerea— AFA), 391, 392-93 
Air Force Command and General Staff 

School (Escola de Comando e 

Estado-Maior da Aeronautica — ECE- 

MAR),393 
Air Force Intelligence Center (Centro 

de Informacoes da Aeronautica — 

CIA), 359 

Air Force University (Universidade da 

Forca Aerea) , 393 
air pollution: levels of, 105 
alagados, 144 

Alagoas (state), 101; political parties in, 

290; state banks in, 278 
Albuquerque, Jeronimo de, 16-17 
Alcantara Launching Center (Centro de 

Lancamento de Alcantara — CLA) , 452 
Aleixo, Pedro, 260 
Alencar, Marcello, 367 
Alexandre Gusmao Foundation, 314 
Alfonsm, Raul, 244, 449 
Alliance for Progress, 324 
alluvial panning, 1 62 
Alves, Francisco de Paula Rodrigues, 64 
Alvim, Hugo Penasco, 354 
Amado, Jorge, 129 



623 



Brazil: A Country Study 



Amapa (state), 99, 100; Amerindian pop- 
ulation in, 126; creation of, 261, 304; 
and drafting of constitution, 262 

Amazonas (state), 99, 101; Amerindians 
in, 125 

Amazon Basin, 94; biodiversity of, 90; 
defense of, 376; and migration, 114; 
military in, 336; population in, 6; set- 
dement area around, 5; vegetation in, 
96 

Amazonia. See Amazon Basin; Amazon 
region 

Amazonian Cooperation Treaty, 372 

Amazon rain forest, lvi, 89; climate in, 
98; deforestation in, lxiii-lxiv, xc-xcii, 
xciv, xcv; soils in, 96; timber extrac- 
tion, 97; tourism in, 208 

Amazon region, 99-101; Amerindians 
in, 125; indigenous people in, 89 

Amazon Region Military Command 
(Comando Militar da Amazonia — 
CMA), 368 

Amazon Region Protection System 
(Sistema de Protecao da Amazonia — 
Sipam), lxxxix-xc, 369-70 

Amazon Region Surveillance System 
(Sistema de Vigilancia da Amazonia — 
Sivam) , lxxxix-xc, 330, 369-70, 404 

Amazon River, liii, 94, 206; length of, 94; 
navigation of, 95; origin of, 94; tribu- 
taries of, 95 

Amazon Working Group (Grupo de Tra- 
balho Amazonico — GTA), 107 

American Orbital Science Corporation, 
452 

Amerindians, 6-9, 124-26; in Amazon 
region, 89, 125-26; land set aside for, 
lxv-lxvi; languages of, 130; massacres 
of, lv; population of, 1 23; slavery of, 
123 

Amin, Angela, 299 

Amin, Esperidiao, 300 

amnesty: Figueiredo proposal for, 349 

AMX project, 425 

Anchieta, Jose de, 19-20 

Andes, 91 

Andrade, Mario de, 128 
Angelica, Mother Joana, 40 
Angola: United Nations mission in, 315, 
354 

Angra I nuclear power plant, 200, 445, 
447, 448 



Angra II nuclear power plant, 200, 201, 

445, 448, 452 
Angra III nuclear power plant, 200, 201, 

445, 448 

Angra dos Reis: power plant at, 327, 447 
Antarctic Treaty: Brazil's participation 
in, 315 

anthropic activities: in Center-West, 103; 
in North, 100; in South, 103; in South- 
east, 102 

anti-environmental groups, 109 

Antonil, Andre Joao, 24 

Applied Economic Research Institute 
(Instituto de Pesquisa Economica 
Aplicada— IPEA), lxvi, 136, 153 

applied science: in agriculture and 
health, 418-19 

Aramar Experimental Center: downsiz- 
ing at, 451-52; inauguration of, 451 

araucaria pine: use of, in Parana, 97 

Arawak (or Aruak) language, 7, 130 

Arcoverde (Green Bow), 16 

area, 89 

Argentina, 91, 94, 242; signing of 
nuclear accords with Brazil, 449-56; 
signing of trade agreement with Bra- 
zil, 244-45 

Argentine-Brazilian Declaration on 
Common Nuclear Policy of Foz do 
Iguacu, 450 

Arianespace, 454 

armed forces (see also air force; army; 
navy), lxxxvi, 256; active political role 
of, 335; command and control of, 377, 
379; conscription in, 385; education 
and training of, 389, 391-94; expan- 
sion of, 341-42; mission of, 366-70, 
372-75; officer recruitment in, 397- 
98; organization of, 377, 379-81, 383- 
85; promotion of pet projects by, 335- 
36; ranks, uniforms, and insignia in, 
385, 387, 389; size of, 340; sociology of 
officer corps in, 394-97; up-or-out 
retirement rules of, 387; women in, 
399-400 

Armed Forces General Staff 

(Estado-Maior das Forcas Armadas — 

EMFA),377, 454,459 
Armed Forces High Command (Alto 

Comando das Forcas Armadas — 

ACFA), 377 
Armed Forces Joint Command 



624 



Index 



(Comando Geral das Forcas Arma- 
das — CMFA) , 459 
armored personnel carriers (APGs) , 363 
arms industry, 366; collapse of, 336; 

exports by, 364, 366 
army {see also armed forces) , 379-81; size 
of, 336 

Army General Staff (Estado-Maior do 
Exercito— EME), 380 

Army General Staff School (Escola de 
Comando de Estado-Maior do Exer- 
cito— ECEME), 77, 346, 348, 392, 
396-97; interlocking of, 348 

Army Intelligence Center (Centro de 
Informacoes do Exercito — CIE), 359- 
60 

Army Technology Center (Centro Tec- 
nologico do Exercito — CTEx) , 426 

Arquipelago de Fernando de Noronha, 
91 

Arraes, Miguel, 288 

Articulation (Articulacao) faction, 285 

Arti gas, Jose Gervasio, 35 

Asia: Brazilian relations with, 322-23; 
comparison of countries in, with Bra- 
zil, 415-16 

Asociacion Latinoamericana de Libre 
Comercio (ALALC) , 242 

Assis, Joaquim Maria Machado de, 128 

Associacao Latino-Americana de Inte- 
gracao (ALADI), 242, 245; replace- 
ment of Latin American Free Trade 
Association (LAFTA) by, 247 

Associations of War College Graduates 
(Associacoes dos Diplomados da 
Escola Superior de Guerra — 
ADESG), 394 

Astronomical Observatory of Rio de 
Janeiro, 418 

Astros II, 329, 364, 459 

Asuncion: fall of, 48 

Asuncion, Treaty of, 245-46, 247, 316 

Asuno: military bases at, 368 

Atlantic coastline: length of, 91 

Atlantic Forest (Mata Atlantica) , lxiv-lxv, 
101; climate in, 98-99; vegetation in, 
96 

Atlantic islands: time zone in, 91 

Atlantic Ocean, 90, 94 

Atol das Rocas, 91 

atomic bomb project, 351 

Atoms for Peace Program, 446, 447 



authoritarian military regime, 150-51 

Automation and Control Systems Engi- 
neering (Engenharia de Sistemas de 
Controle e Automacao — ESCA) , 370 

automotive industry, lviii; creation of, 73; 
development of, 6; growth of, 195; 
production of motor vehicles, 160 

average income, 102 

Avibras Aerospace Industry, Inc. (Avibras 
Industria Aeroespacial S.A. — Avi- 
bras), 363,364, 366,459 

Azores, 15 



Bahia (state), 101; climate in, 99; hydro- 
electricity in, 95; military in, 337-38; 
political parties in, 289; population in, 
110; ranching in, 26; science and tech- 
nology in, 434; tourism in, 208 

Bahia de Todos os Santos (Bay of All 
Saints), 17-18 

Bahian Reconcavo: early settlement of, 4 

baixadas, 144 

Balaiada Rebellion, 44 

balance of payments policy: implications 
for, 215-17 

bananas, 190 

bandeirantes, 12, 129, 207, 337 

Bank of Brazil (Banco do Brasil — BB), 

33, 264, 375-77 
Baptista, Joao, 426 
Barbosa, Marcio Nogueira, lxiv 
Barbosa, Mario Gibson: foreign relations 

under, 319 
Barman, Roderick J., 44 
Barreira do Inferno Launch Center 

(Centro de Lancamento da Barreira 

do Inferno) , 452 
Barros, Prudente Jose de Morais, 58-59 
Batista, Nilo, 374 
Batista, RandasJ.V., lv 
beans, 190 

beef-cattle herd: growth of, 190-91 
beef exports, 46 

Belem, 101; climate in, 98; as deep-water 
port, 206; population of, 186; settle- 
ment of, 1 1 

Belgian Congo: Brazilian participation 
in, 353-54 

Bello, Jose Maria, 58 

Belo Horizonte: climate in, 98 

Bemfam, 113 



625 



Brazil: A Country Study 



Beresford, William Carr, 35 

Bernardes, Artur da Silva, 342 

Big Center (Centrao), 286, 306; forma- 
tion of, 260-61 

Biological Institute for Animal Protec- 
tion (Instituto Biologico de Defesa 
Animal), 418 

biological reserves, 105 

bipolarity: transformation from, to mul- 
tipolarity, 357 

birth control: methods of, 113 

birthrates, 110,111; decline of, 112-13 

Biscaia, Antonio Carlos, 374 

bisexuals: and acquired immune defi- 
ciency syndrome (AIDS), 138 

black market, lxviii 

black population: illiteracy rate of, lxx; 
subsistence-level living standards of, 
lxx 

Blanco regime (Uruguay): conspiracy to 

replace, 48 
Bloch, Adolfo, 207 
Boaventura, Miguel Lucena, 63 
Boa Vista: military bases at, 368 
Boff, Leonardo, 134 

Bolivia, 91; foreign relations with, 316, 

317 
borders, 91 
bossa nova, 89, 130 

Botanical Garden (Jardim Botanico), 33 

boundaries: ecological, 99 

Boxer, Charles, 22, 26 

Braganca e Bourbon, Pedro de Alcan- 
tara de. See Pedro II 

Bragancas: settlement of, 11 

Brasilia, 90, 103; climate in, 98; judicial 
system in, 275; movement of capital 
to, lx, 6, 73; railroad transportation to, 
205; Regional Federal Court (Tribu- 
nal Regional Federal — TRF) in, 275; 
time zone in, 91 

Brasilia Military Academy (Colegio Mili- 
tar), 391 

BrasilRafa (Brazil Race), lxx 

Bras Pereira Gomes, Venceslau, 342 

Brazilian Aeronautics Company 
(Empresa Brasileira Aeronautica — 
Embraer), lxxxvi, 213, 351, 363, 364, 
437; privatization of, 330, 366 

Brazilian Agriculture and Livestock 
Research Enterprise (Empresa 
Brasileira de Pesquisa Agropecuaria — 



Embrapa) , 426, 434 

Brazilian Air Force (Forca Aerea 
Brasileira — FAB) . See air force 

Brazilian Airport Infrastructure Firm 
(Empresa Brasileira de Infraestruc- 
tura Aeroportuaria — Infraero), 384 

Brazilian Aluminum Association (Asso- 
ciacao Brasileira de Aluminio — 
ABAL),309 

Brazilian Amazon Deforestation 
Appraisal Program (Programa de 
Avaliacao do Desflorestamento da 
Amazonia Brasileira — Prodes) , xci 

Brazilian-Argentine Agency for Account- 
ing and Control of Nuclear Materials 
(Agenda Brasileiro-Argentina de 
Contabilidade e Controle de Materials 
Nucleares — ABACC) , 351, 450, 451 

Brazilian-Argentine Agreement on the 
Peaceful Use of Nuclear Energy, 449 

Brazilian Armed Forces (Forcas Armadas 
Brasileiras) . See armed forces 

Brazilian Army (Exercito Brasileiro). See 
army 

Brazilian Association for the Defense of 
Democracy (Associacao Brasileira de 
Defesa da Democracia— ABDD), 350 

Brazilian Association of Nongovernmen- 
tal Organizations (Associacao 
Brasileira de Organizacoes Nao-Gover- 
namentais— ABONG), 108 

Brazilian Association of Radio and Tele- 
vision Companies (Associacao 
Brasileira das Empresas de Radio e 
Televisao— ABERT), 309 

Brazilian Association of Tradition, Fam- 
ily, and Property (Sociedade Brasileira 
de Defesa da Tradicao, Familia e Pro- 
priedade— TFP), 310 

Brazilian Center for Physics Research 
(Centro Brasileiro de Pesquisas Fisi- 
cas— CBPF),422, 423,431 

Brazilian Center of Infancy and Adoles- 
cence (Centro Brasileiro de Infancia e 
Adolescencia— CBIA), 121 

Brazilian Commission for Space Activi- 
ties (Comissao Brasileira de Atividades 
Espaciais — Cobae) , 454 

Brazilian Communications Company 
(Empresa Brasileira de Communi- 
cacao) , 207 

Brazilian Communist Party (Partido 



626 



Index 



Comunista Brasileiro— PCB), 71, 279, 
288, 324 

Brazilian Computers and Systems (Com- 
putadores e Sistemas Brasileiros — 
Cobra), 427 

Brazilian Cooperation Agency (Agenda 
Brasileirade Cooperacao — ABC), 314 

Brazilian Democratic Movement (Movi- 
mento Democratico Brasileiro — 
MDB), 82, 268-69, 280, 282; origin of, 
279 

Brazilian Democratic Movement Party 
(Partido do Movimento Democratico 
Brasileiro— PMDB), 259, 270, 280, 
281, 282-83, 289, 291, 304, 307; and 
formation of Big Center, 260-61 

Brazilian Discount Bank (Banco 
Brasileiro de Descontos — Bradesco), 
lvii 

Brazilian Electric Power Company (Cen- 
trais Eletricas Brasileiras S.A. — Eletro- 
bras), lxxx, 72, 308, 425, 426 

Brazilian Electro-Electronic Industry 
Association (Associacao Brasileira da 
Industria Eletro-Eletronica — 
ABINEE),309 

Brazilian Expeditionary Force (Forca 
Expedicionaria Brasileira — FEB), 72, 
353 

Brazilian Forum of NGOs, 107 
Brazilian funk, liii 

Brazilian Institute for the Environment 
and Renewable Natural Resources 
(Instituto Brasileiro do Meio-Ambi- 
ente e dos Recursos Naturais Ren- 
ovaveis — Ibama),xci, 107 

Brazilian Institute of Christian Commu- 
nication, 207 

Brazilian Institute of Geography and Sta- 
tistics (Fundacao Instituto Brasileiro 
de Geografia e Estatistica — IBGE), 
lxii, 117, 143 

Brazilian Institute of Scientific and Tech- 
nological Information (Instituto 
Brasileiro de Informacao em Ciencia e 
Tecnologia— IBICT), 431, 444 

Brazilian Institute of Social and Eco- 
nomic Analysis (Instituto Brasileiro de 
Analise Social e Economica — IBASE), 
152, 309 

Brazilian Intelligence Agency (Agenda 
Brasileira da Inteligencia Nacional — 



ABIN),xciii, 362 

Brazilian Labor Party (Partido Trabal- 
hista Brasileiro— PTB), 276, 279, 280, 
284, 289, 292, 304 

Brazilian Literacy Movement (Movi- 
mento Brasileiro de Alfabetizacao — 
Mobral), 146 

Brazilian Navy (Marinha do Brasil). See 
navy 

Brazilian News Agency, 207 

Brazilian Nuclear Corporations (Empre- 

sas Nucleares Brasileiras S.A. — Nucle- 

bras),447 

Brazilian people: character of, 128-30; 
historical roots of, 14-20; racial char- 
acteristics of, 122-24 

Brazilian Petroleum Corporation (Petro- 
leo Brasileiro — Petrobras), lxxx, 72, 
197-200, 213, 308, 322, 374, 425, 426, 
436; creation of, 437; oil monopoly of, 
324 

Brazilian Popular Front (Frente Brasil 

Popular— FBP) , 288 
Brazilian Progressive Party (Partido Pro- 

gressista Brasileiro — PPB) , lxxxiv, 282 
Brazilian Radio Broadcasting Company 

(Empresa Brasileira de Radiodi- 

fusao— Radiobras) , 207 
Brazilian Satellite (Brasilsat) program, 

458 

Brazilian Satellite Communication Sys- 
tem (Sistema Brasileiro de Comuni- 
cacao por Satelites— SBTS), 454 

Brazilian Social Democracy Party 
(Partido da Social Democracia 
Brasileira— PSDB), lxxv, 257, 281, 
286-87, 289, 296, 307 

Brazilian Socialist Party (Partido Social- 
ists Brasileiro— PSB) , 288, 289, 305 

Brazilian Society for Scientific Develop- 
ment (Sociedade Brasileira para o 
Progresso da Ciencia— SBPC) , 422, 
430 

Brazilian Space Agency (Agenda Espa- 
cial Brasileira — AEB) , 455-56 

Brazilian space program, 335-36, 452-58 

Brazilian Telecommunications Company 
(Empresa Brasileira de Telecomuni- 
cacoes— Embratel) , 208, 312, 454 

Brazilian Telecommunications, Inc. 
(Telecomunicacoes Brasileiras S.A. — 
Telebras), lxxx-lxxxi, 208, 425, 426, 



627 



Brazil: A Country Study 



437 

Brazilian Television System (Sistema 
Brasileiro de Televisao— SBT) , 207 

Brazilian Tourism Agency (Empresa 
Brasileira de Turismo — Embratur), 
209 

Brazil Network (Rede Brasil), 207 
Brazil nuts, 100 
Brazil Railroad, 63 

Brazil-West Germany agreement, 200-1 
brazilwood, 3, 15 
Bresser Pereira, Luiz Carlos, 237 
Bresser Plan, 237 

Britain {see also England): and Seven 

Years' War, 28 
Brizola, Leonel de Moura, 76, 77, 147, 

276, 284-85, 305, 325 
Brown, Ron, 330, 370 
Budgetgate scandal, 270 
Buenos Aires: research and development 

in, 418 

Butantan Institute (Instituto Butantan), 
418, 439 



caatinga ecosystem, 96, 101, 104 
Cabanagem Rebellion (1835), 44, 149 
Cabeza de Vaca, Alvar Nunez, 11-12 
caboclos, 125, 126 
Cabo Verde, 320 
Cabral, Pedro Alvares, 6, 14 
Cachimbo: nuclear test site in, 449 
Cadet Preparatory School (Escola 

Preparatoria de Cadetes— EPC) , 398 
Cafe Filho, Joao: nuclear policy under, 

445 
Caiapo, 125 

Camara, Jose Antonio Correia de, 52 

Caminha, Pero Vaz de, 14 

campaign finance: contributions to, 311; 
restrictions on, 301 

Campinas State University (Universidade 
Estadual de Campinas — Unicamp), 
148, 422; establishment of, 424 

Campo Grande Airport, 103, 205-6 

Campos, Roberto, 325 

Candelaria Church, 403 

candomble, lxx, 1 34 

Canudos, 64; destruction of, 58-59, 62 
Cape of Good Hope, 1 4 
Cape Verde Islands, 9; independence of, 
319 



capital flight: from Brazil, 226 

capital flows: and external debt, 217-21 

capital goods: growth of, 1 70 

capitalism: European, 4 

capital punishment, 405 

Carajas. See Greater Carajas project 

Carasales, Julio Cesar: nuclear policy 
under, 451 

cardboard: production of, 160 

Cardoso, Fernando Henrique, lv, lviii, 
lxv, 257, 272, 286, 292, 296, 352, 410; 
academic qualifications of, lxxvi-lxx- 
vii; cabinet under, lxx, 264; and cre- 
ation of Extraordinary Ministry for 
Agrarian Reform, lxxii; economic pol- 
icy under, lxxxii-lxxxiii, 179, 305; 
entrance into politics, lxxvi; foreign 
relations under, lxxxvii, 320, 330; and 
human rights violations, 408; inaugu- 
ration of, 257, 373; as minister of 
finance, 179, 305; and national secu- 
rity, lxxxvii-lxxxviii; in 1994 election, 
lxxvi; nuclear policy under, 452; popu- 
larity of, lxxxi-lxxxii; presidency of, 
256, 296-98; privatization under, 
Ixxix-lxxxi, 213; reforms under, lxx- 
vii-lxxix, lxxxiii-lxxxiv, 257; and 
Roman Catholic Church, lxxii; stabili- 
zation plan of, lxxiv-lxxv; state visit to 
Washington, lxxxv-lxxxvi; and Strate- 
gic Affairs Secretariat, 362 

Cardoso, Henrique Assuncao, lxxvii 

Cardoso, Mauricio, lxxvii 

Cardoso, Ruth Correa Leite, lxxvi 

Cardoso de Melo, Zelia, 300 

Carib speakers, 7, 130 

Carnaval (Carnival) festivities, 90, 130; as 
tourist attraction, 208 

Carneiro, Eneas, 285 

Carta di Lavoro model, 255 

Carter, Jimmy, 357; administration of, 
82; United States-Brazil relations 
under, 327-28 

Carvalho, Jose Murilo de, 367 

Castelo Bran co, Humberto de Alencar 
(also spelled Castello), 77, 78-79, 94, 
346, 359; and creation of National 
Intelligence Service, 358; defeat of, 
349; foreign relations under, 319, 325; 
and military, 346, 383-84, 387; and 
political party system, 279; presidency 
of, 260 



628 



Index 



Castilhos, Julio de, 58 

Castro, Domitila de, 38 

Castro Ruz, Fidel: radicalization of Cuba 

under, 76 
Castro, Martinho de Melo e, 30-31 
Castroites, 285 

Catholic Charismatic Renewal, lxix-lxx 
Catholic Counter-Reformation, 18-20 
Catholic University of Petropolis (Pon- 
tificia Universidade Catolica de Petro- 
polis), 151 
catde industry (see also livestock), 161; 
development of, 162; importance of, 
4-5 

Caxias, Duke of (Duque de Caxias), 44, 
51,340 

Ceara (state), 101; local government in, 
287; political parties in, 281; ranching 
in, 26; setdementof, 11 

Celso, Afonso, 61 

cement: production of, 160 

Center for Development of Nuclear 
Technology (Centro de Desenvolvi- 
mento de Tecnologia Nuclear — 
CDTN),446 

Center for Indian Rights (Nucleo de 
Direitos Indigenos — NDI) , 309 

Center-West (Centro-Oeste) , 96, 103; 
Amerindian population in, 126; cli- 
mate in, 98-99; and migration, 114; 
mortality in, 111; population in, 109, 
110 

Central Bank of Brazil (Banco Central 
do Brasil— Bacen) , lxxxi, 218, 278, 
354, 375-77 

Central Highlands, 94 

cerejeira, 97 

Cerqueira, Nilton, 367 

cerrado (savanna) , 96, 101, 103, 108 

Cerro Castello, 37 

cesarean section, 113 

Ceylon: relations with, 322 

Chagas' disease, 138 

Chamber of Deputies (Camara dos Dep- 
utados), 105, 257; legislative initiative 
in, 269; Research Staff Association in, 
310; size of, 265 

Chateaubriand Bandeira de Melo, Fran- 
cisco de Assis, 311 

child labor, lxvi, 121 

Children's Statute, 121 

Chile, 91; foreign relations with, 317 



China: and space development, 454 

China-Brazil Earth Resources Satellite 
(Satelite Sino-Brasileiro de Recursos 
Terrestres— CBERS), 454, 456 

Chiquitos: setdementof, 12 

cholera, 138 

Christian Democratic Party (Partido 

Democratico Cristao — PDC), 281 
Christopher, Warren, xcii 
Cicero, Padre, 133 
Cingapura project in Sao Paulo, lxix 
cinnamon, 100 
Cirio, 133 

Cisplatine Province, 35; war over, 41-42 
Cisplatine War, 41-42 
city council members, 278-79 
civic-acdon project: military involvement 
in, 374-75 

Civil Aviation Department (Departa- 
mento de Aviacao Civil— DAC), 209 

Civil Household, 107 

civil-military relations (1985-94), 350-52 

Civil Police (Polfcia Civil— PC) , 400, 401, 
402, 409; tensions between Military 
Police and, 406 

civil service. See public employees 

clientelism, 116, 256 

climate, 97-99 

Clinton, William Jefferson, 317; adminis- 
tration of, lxxxviii-lxxxix 
coalitions, 302, 304 

coastal shipping: state-held monopolies 

on, 298 
coastal zone, 94 

Cochrane, Thomas Alexander (Lord 

Dundonald),40, 41, 338 
cocoa, 100, 190, 216 
Code of Mines (1934), 420 
Coelho, Edmundo Campos, 348 
Coelho Pereira, Duarte, 16-17 
coffee, 187, 190, 216; collapse of prices, 
233; decline in world demand for, 167; 
expanding production of, 46-47; 
export of, 42, 46; impact of, on Brazil- 
ian economy, 163-66; labor on planta- 
tions, 123; production of, 59-60; 
support program for, 167 
Coimbra, University of, 29, 31 
College of Party Leaders, 270, 272 
colleges and universities (see also specific 
colleges and universities) , 147-49; 
reforms in, along United States model 



629 



Brazil: A Country Study 



of graduate education, 415 
Collor, Pedro, 294 

Collor de Mello, Fernando, 263-64; 
acquittal on corruption charges, lxxiv; 
and Amerindian policy, 125; and chil- 
dren's rights, 121; civilian political 
institutions under, 351-52; corruption 
under, 225-26; economic programs 
under, 178, 239-40, 293-94; education 
under, 146-47; election of, 287-88, 
303; environmental policies under, 
107; and establishment of Yanomami 
Indigenous Park, 372; fall of, 249; for- 
eign relations under, 329; impeach- 
ment of, lxxiii-lxxiv, 152, 179, 257, 
265, 270, 429; industry under, 192-93; 
military under, 351; nuclear programs 
under, 449, 450, 451; and Parallel Pro- 
gram, 335; passage of emergency legis- 
lation by, 303-4; political isolation of, 
352; presidency of, 256, 293-94; priva- 
tization program under, 295; science 
and technology policy under, 429; sta- 
bilization program of, 227; Strategic 
Affairs Secretariat under, 360, 362 

Colombia, 91; Brazilian border with, 
367-68; foreign relations with, 316, 
317 

colonelism (coronelismo) , 116, 255 
Colonia do Sacramento: Portuguese fort 
at, 13 

colonial period, 9-34; economic growth 
in, 160-61; military units in, 337-38 

colonial science period, 417 

colonization, early, 14-21 

Colorados (Uruguay), 339 

Commission for Defense of the Con- 
sumer, the Environment, and Minori- 
ties, 105, 107 

Commission on Policies for Sustainable 
Development and Agenda 21 , 107 

Common Market of the South (Mercado 
Comum do Sul — Mercosul), lxxxvii, 
115, 240, 314, agreements, 245; efforts 
to consolidate, lxxxv 

Common System for Accounting and 
Control of Nuclear Materials (Sistema 
Comum de Contabilidade e Controle 
de Materiais Nucleares— SCCC) , 450 

communism, 90 

Communist Party of Brazil (Partido 
Comunista do Brasil — PC do B) , Ixx- 



vii, 288-89, 289, 305 
Complete Brazilian Space Mission (Mis- 

sao Espacial Completa Brasileira — 

MECB), 454-55, 456 
computer industry: market in, lvi; 

nationalization of, 363; policy on, 

427-28 

Computer Technology Center 
(Fundacao Centro Tecnologico para 
Informatica— CTI) , 427 
Condor II ballistic missile program, 458 
Congress: constitutional reforms 
enacted by, 297-98; meeting as a Con- 
stituent Assembly, 350-51; powers of, 
268 

congressional and state elections of 

1990,303-4 
Congressional Investigating Committee 

(Comissao Parlamentar de Inque- 

rito— CPI), lxxiv, 262, 269-70, 293, 

352, 445 
consensual unions, 118 
conservation, 198 

Conservation International (CI), 108 

Constant, Benjamin, 340 

Constituent Assembly (Assembleia Con- 

stituinte), 38, 41, 56 
constitutional framework, 259-62 
constitution of 1814, 41 
constitution of 1824, 45, 259 
constitution of 1891, 54, 56-57, 255, 259 
constitution of 1934, 68, 70, 255, 259 
constitution of 1937, 259 
constitution of 1946: federalism in, 277- 

78 

constitution of 1967, 260 

constitution of 1988, lix, 54, 275; and 
access to medical care, 139-40; cre- 
ation of new states by, 303-4; electoral 
system in, 152, 300-3; environmental 
precepts in, 105, 107; equality of 
women in, 118; family planning in, 
114; impact on public-sector finances, 
226-27; judicial system under, 273; 
media in, 311; Military Police in, 402; 
National Defense Council in, 377, 379; 
patterning of, 255; Penal Code in, 
405, 408; political parties in, 290; 
power of president in, 367 

Contadora Support Group, 316 

Contestado, 62-64, 65 

contraband trade, 10 



630 



Index 



Coordinating Board of Postgraduate 
Programs in Engineering (Coorde- 
nacao dos Programas de P6s-Gradua- 
cao em Engenharia — Coppe): estab- 
lishment of, 424, 436 

Copacabana, 89 

Copacabana Revolt (1922) , 64 

copyright laws, 331 

coral reefs, 94 

corn, 190 

coroneis, 338 

coronelismo, 258 

corporation, 255 

corporatist, 150 

Correia, Villas-Boas, Ixxxiv 

Costa, Antonio Rodrigues da, 28 

Costa, Emilia Viotti da, 50 

Costa e Silva, Artur da, 78, 79-80, 346, 
349; death of, 80; foreign relations 
under, 319, 325-26, 326; and military, 
346; presidency of, 260 

cotton, 187, 190 

Council for Advanced Professional 
Training (Fundacao Coordenacao de 
Aperfeicoamento de Pessoal de Nivel 
Superior— CAPES) , 433, 444; respon- 
sibilities of, 433-34 

Council of the Republic (Conselho da 
Republica), 379 

Council of Trent, 17 

counterdrug actions: military role in, 

372-74 
Count of Nassau, 22 

coup(s) d'etat: of 1930, 345; of 1945, 
345; of 1964, 80, 171-72, 345-46 

courts, judicial system; see also specific 
regional courts 

Cratenia, 368 

crawling-peg policy, 215, 217, 237 
crime and punishment: crime, lx-lvii, 

403- 4; lynchings, 404; penal code, 

404- 6, 408; penal institutions, 408-9 
crude death rate, 111 

cruzado: devaluations of, 236 

Cruzado Plan (1986), 215, 217, 224, 225, 
228, 236, 292, 294, 296, 305; and capi- 
tal outflows, 220; objective of, 177 

Cruz Alta: military bases at, 368 

cruzeiro: value of, 168 

Cruzeiro do Sul: military bases at, 368 

Cuba: Fidel Castro's radicalization of, 76 

Cuiaba, 1 03 



cultural unity and diversity, 126-28; Bra- 
zilian way, 128-30; family and kinship, 
132; language, 130-31; mass commu- 
nication, 131-32 

Cunha, Dom Luis da, 28, 32 

Cunha, Euclydes da, 149-50 

Cunha, Vanessa, 299 

Curitiba, 102; climate in, 98; as model 
city, liv-lv; population of, 186 

current account: deficit in, 174; financ- 
ing, 174 

Customs Policy Council (Conselho para 
Poh'tica Aduaneira— CPA) , 238 

dance, 130 

Dantas, Santiago, 325 

DataBrasil Research Institute (Instituto 

de Pesquisas DataBrasil) , lxii 
Data-Collecting Satellite (Satelite de 

Coletade Dados— SCD-1), 452, 453 
Day of the Republic (November 15), 300 
death squads, lxi, 403 
debt crisis, 214, 219-21 
debt service, 174 
decentralization, 154 
defense expenditures, lxxxviii, 375-77; 

level of, 336 
defense industries, 363-66 
Defesa National, 64 
deforestation, lxiii-lxiv, 6, 103 
degredados, 14 

Delfim Netto, Antonio, lxxxii 
Deliberative Council (Conselho Deliber- 
ative), 431 
Delta, 449 
democracy, lviii 

Democratic Labor Party (Partido 
Democratico Trabalhista— PDT) , 280, 
284-85, 289, 303, 304; creation of, 276 
democratic rule: consolidation of, 409 
Democratic Social Party (Partido 
Democratico Social— PDS), 259, 280, 
281, 291, 304 
Demographic and Health Survey, 113 
demographic transition, 110 
Denevan, William M., 6 
dengue (breakbone fever) , 138 
Department of Foreign Trade (Carteira 
de Comercio Exterior — Cacex), 238, 
239; policy of import restrictions, 235- 
36 



631 



Brazil: A Country Study 



desertification, 104 
d'Hondt method, 269 
diamonds: mining of, 4-5 
Diarios Associados newspaper chain, 31 1 
diarrhea: and mortality, 111; and respira- 
tory diseases, 139 
dieselfuel, 197 
diphtheria, 137 

Directorate of Logistical Support (Dire- 
toria de Apoio Logistico — DAL) , 446 

Directorate of Radiation Protection and 
Nuclear Safety (Diretoria de Radio- 
protecao e Seguranca Nuclear — 
DRS), 446 

Directorate of Research and Develop- 
ment (Diretoria de Pesquisa e Desen- 
volvimento — DPD), 446 

dire tas jd! (direct now!) movement, 83 

diretasjd! constitutional amendment, 291 

disability benefits, 143 

discrimination, 116 

disease, 138; and indigenous population, 

7; chronic diseases, 137-39 
distensdo, 81-82 
districts, 99 

divorce, 132; legality of, 118 

domestic debt, 176-77 

domestic violence, 120 

Dominican Republic: Brazilian participa- 
tion in United Nations forces in, 353- 
54 

donatory captaincy system, 10, 15 
Dornbusch, Rudiger, lxxxii 
draft dodging, 341 
drainage basins, 94 
dropout rate, 121 

drug trafficking, lxxxviii-lxxxix, xc, 99- 
100, 150, 330, 357, 373-74; level of, 
404 

Dumont, Alberto Santos, lvi 
dunes, 94 

durable consumer goods: growth of, 170 
Dutch: colonial warfare against, 337; 
incursions by, 21-23; seizure of 
Luanda by, 4; seizure of Recife by, 4 
Dutch West India Company: formation 
of, 22 

Dutra, Enrico Gaspar, 70-71 , 345; for- 
eign relations under, 324; military pro- 
gram under, 71 

dye wood, 96 



earnings, 1 83-84 

Earth Summit, 104; role of Brazil in, 107 
East Bank of the Rio de la Plata, 47 
Eastern Standard Time, 91 
Ecclesiastical Base Communities (Comu- 

nidades Eclesiais de Base — CEBs), 

134, 152,310 
ecclesiastical patronage, 50-51 
Eco-8, 208 
Eco-92, lxiv, 209 
ecological boundaries, 99 
ecological security, Ixxxix 
Economic Bank (Banco Economico), 

lxxxi 

Economic Commission for Latin Amer- 
ica and the Caribbean (ECLAC), 241 

economic crisis and environmental deg- 
radation, 105 

economic development and national 
security, 335 

economic growth: and coffee economy, 
163-66; in colonial period, 160-61; 
with debt, 173-74; and eighteenth- 
century gold rush, 162-63; and 
import-substitution industrialization , 
168-71; at independence, 163; infla- 
tion and crisis, 174-80; spectacular, 
172-73; stagnation, 171-72; and sugar 
cycle, 161-62; sweeping change in, 
166-68 

economic nationalism, 420 

economic outlook, 248-50 

economic periods: brazilwood logging, 
3; import-substitution industrializa- 
tion, 5-6; livestock trade, 4-5; mining, 
4; sugar era, 3-4 

economic shocks: heterodox, 177 

economic stabilization plan (1990), 303 

economy: expansion of, 73-74; and fiscal 
deficits and inflation, 227-29; fiscal 
trends in 1980s, 222; informal, Ixviii; 
international participation in, 330; 
and need for large-scale fiscal reform, 
177; size of, lvi; stagnation in, 415 

Ecuador, 91; foreign relations with, 317 

education, 118, 119, 144-45; colleges 
and universities, 147-49; graduate, 
436-37; inequalities of system, lxvii- 
lxviii; and language, 131; literacy, 145- 
46; primary and secondary schools, 
146-47; principal research libraries, 
149; and school enrollment, 121, 153; 



632 



Index 



and school nonattendance, 147; 

schools for the military, 389-98 
Edwards, Sebastian, lxxxii 
Egypt: foreign relations with, 318 
Eisenhower, Dwight D., 324, 446 
elderly, 122 

El Dorado de Carajas, lxxii 

election day: as national holiday, 300 

electoral system, 300-2; in 1994, 304-7 

electric power, 160, 195-96 

Electric Power Research Center (Centro 

de Pesquisas de Energia Eletrica — 

Cepel),437 
emigration: from Brazil, 115 
Emilio Goeldi Museum of Para (Museu 

Paraense Emilio Goeldi— MPEG) , 431 
empire (1822-89), 37-54 
employment, lxviii; informal-sector, 183; 

level of, 180-83 
energy price policy, 198; government 

implementation of, 197 
energy production, 195-207 
England {see also Britain): signing of 

Methuen Treaty (1703) with, 27 
enlightened despotism, 424 
environment, 103-9; public policies 

regarding, 105, 107 
Environmental Crimes Law, xci 
environmental degradation and eco- 
nomic crisis, 105 
environmental movements: growth of, 

151-52 
equatorial North, 99-101 
Ericsson Radar Electronics Erieye, 369 
espiritas, lxx 
Espirito Santo, 17 

Espirito Santo Power Plants, Inc. 

(Espirito Santo Centrais Eletricas 

S.A.— Escelsa), 102,213 
ethanol, 198 
Europeanization, 18-20 
European Space Agency (ESA), 456 
exchange rates: and balance of payments 

policies, 213-21; and foreign trade, 

214-17 
executive branch, 263-65 
export incentives for, 214 
export-led growth, 243-44 
exports, 3; beef, 46; coffee, 46, 89; of 

food, 6; growth in crops, 190; patterns, 

240-48; sugar, 46 
external debt and capital flows, 217-21 



external payments: problems with, 236; 
worsening of Brazil's position, 234-35 



factory system, 3 

Faculty Improvement Integrated Pro- 
gram (Programa Integrado de Capaci- 
tacao de Docentes— PI CD) , 433 

Faletto, Enzo, lxxvi 

Falkland/Malvinas Islands: Argentine 

invasion of, 349 
family and kinship, 132 
family planning services, 114 
family structures: changes in, 120 
Farias, Paulo Cesar, 294, 303 
Farquhar, Percival, 63 
Farroupilha Rebellion (1835-45), 44 
favelas, 89, 144, 150; massacres in, 90; 

migration to, lxviii 
Federal Administration Secretariat (Sec- 

retaria de Administracao Federal — 

SAF),264, 296 
Federal Court of Appeals (Tribunal 

Federal de Recursos— TFR) , 273; cre- 
ation of, 274 
Federal District: and drafting of Organic 

Law, 99, 103, 262 
Federal District, University of (Univer- 

sidade do Distrito Federal), 419 
Federal Police, 400-1 , 409 
Federal Prison Department (Departa- 

mento Penitenciario Nacional — 

Depen),408 
Federal Railroad Police, 400 
Federal Railroad System, Inc. (Rede Fer- 

roviaria Federal S.A.— RFFSA), 205, 

212 

Federal Republic of Germany (West Ger- 
many): cooperation agreement with, 
425 

Federal Savings Bank (Caixa Economica 

Federal— CEF),lvii, 264 
Federal Senate (Senado Federal) , 257 
Federal Supreme Court (Supremo Tri- 
bunal Federal— STF), 265, 273-74; 

president of, 274 
Federal University of Minas Gerais (Uni- 

versidade Federal de Minas Gerais — 

UFMG), 148 
Federal University of Rio de Janeiro 

(Universidade Federal do Rio de 

Janeiro— UFRJ), 148,419 



633 



Brazil: A Country Study 



Federal University of Santa Catarina, 436 
Federal University of Vic osa, Minas 

Gerais, 440 
Federation of Social and Educational 

Assistance Agencies (Federacao de 

Orgaos para Assistencia Social), 152 
fellowships, 431, 433; for United States 

study, 41 5 
female sterilization, 113 
Fernando VII (king of Spain), 34, 35 
Fernando de Noronha (territory), 101; 

archipelago of, 91 
Ferraz, Esther Figueiredo, 300 
fertility, liv, 111-14; decline in, 110 
Festa do Divino, 133 

Fifth Institutional Act (December 13, 
1968), 80, 82, 260, 272 

Figueiredo, Joao Baptista de Oliveira, 81, 
82-83, 120, 346, 352, 426; and censor- 
ship, 131; economic policies under, 
224; executive branch under, 264; for- 
eign policy under, 320, 357; initial 
decree laws of, 272; nuclear policy 
under, 449; presidency under, 272; 
proposal for amnesty, 349; term of 
office for, 264 

fishing industry, 191-92 

Fittipaldi, Emerson, liv 

fixed exchange rates: move to, 169 

flagrante delicto, 405 

Flecha de Lima, Paulo de Tarso, 318 

Fleischer, David V., lix, 345-46, 350, 359, 
374 

Fleming, Yolanda, 299 
Flint, Charles, 57 
Flores, Mario Cesar, 362, 372, 383 
Florianopolis: research center in, 439 
Folha de Sao Paulo, 312 
Fonseca, Hermes Rodrigues da, 61, 62, 
64-65 

Fonseca, Manuel Deodoro da, 52, 53, 54, 
55-56, 56, 57, 61, 340; and dissolution 
of Congress, 58; election as president, 
340; and promulgation of new consti- 
tution, 340-41 
Fontenelle, Luiza, 298 
Ford, Gerald R., administration of: for- 
eign relations with, 328 
foreign-exchange rate: overvalued, 168 
foreign military influence, 354, 356-58 
foreign relations: with Africa, 319-20, 
322; with Asia, 322-23; decision mak- 



ing in, 313-15; with Europe, 316-17; 
with Latin America, 315-16; with Mid- 
dle East, 317-18; multilateral relations 
in, 315; with United States, 323-31 

foreign service, 313 

forest zone, 101 

forro, 130 

Fortaleza, 101; average household 
income of, 186; as deep-water port, 
206; population of, 186 

Fort Principe de Beira, 13 

Foz do Iguacu: tourism in, 208 

France Antarctique, 21 

Franco, Itamar, 362, 370; completion of 
mandate, 265; economic programs 
under, 227, 295-96; expansion of cabi- 
net under, 264; foreign relations 
under, 320, 329-30; and funding for 
Angra II, 448; "muddling through" 
policy under, 257; presidency of, 179, 
256, 295-96; privatization under gov- 
ernment of, 213; science and technol- 
ogy policy under, 429-30; space 
program under, 455; ties with military, 
352; unpopularity of, lxxiv 

Franz I of Austria, 34 

Free Trade Area of the Americas 
(FTAA),lxxxvii, 317 

Freire, Roberto, 288, 307 

French: colonial warfare against, 337; 
incursions by, 21-23; settlement by, 3 

French Guiana, 91; Brazilian border 
with, 367-68 

French Military Mission, 342, 348 

Freyre, Gilberto, 124, 128 

Frota, Sylvio Couto Coelho da, 82, 360, 
381 

Funding Authority for Studies and 
Projects (Financiadora de Estudos e 
Projetos — Finep), 424, 429; responsi- 
bilities of, 433-34 

Furnas Electric Power Plants, Inc. (Fur- 
nas Centrais Eletricas S.A. — Furnas), 
448 



Gama, Vasco da, 9 
gambling, 150 
Garcia, Aleixo, 15 
Gazeta Mercantil, 312 

Geisel, Ernesto, 81-82, 260, 346; foreign 
relations under, 326, 357; inaugura- 



634 



Index 



tion of, 447; and military, 346; rise of, 

349; science and technology policy 

under, 424 
Geisel, Orlando, 359 
gender, 118-21; and literacy, 146 
General Agreement on Tariffs and Trade 

(GATT), 242, 322; Brazil's participa- 
tion in, 315 
Geneva Convention, 360 
geography, liii, 99-103 
Geological Commission of Sao Paulo 

State (Comissao Geologica do Estado 

de Sao Paulo), 418 
geology, geomorphology, and drainage, 

91 , 94-95 
geopolitical changes, 336 
Ge speakers, 7, 8, 130 
Getulio Vargas Foundation (Fundacao 

Getulio Vargas) , 441 
Gini coefficient, 185; metropolitan, 186 
Global Environment Facility (GEF), 108 
Globo network, 207, 312 
Globo Organizations (Organizacoes 

Globo), 312 
Goes, Walder de, 376 
Goes Monteiro, Pedro de, 343, 345 
Goiania, 103 

Goias (state), 99, 103, 126; early settle- 
ment of, 4; ranching in, 26 

Golbery do Couto e Silva, Artur, 280, 
284, 358, 360 

gold: discovery of, in Mato Grosso, 12- 
13 

Golden Law of May 13, 1888, 53 
gold mining, 4-5, 162-63; displacement 
of sugarcane farming by, 23-24, 26-32 
Gomes, Ciro, lxxiv 

Gomes, Venceslau. See Bras Pereira 
Gomes, Venceslau 

Goncalves, Gardenia, 299-300 

Goncalves, Leonidas Pires, 398 

Gordon, Lincoln, 80 

Goulart, Joao, 74, 75, 76, 77-78, 322, 
345; flight of, to Uruguay, 78; foreign 
relations under, 324-25; nuclear pol- 
icy under, 445; overthrow of, 325; pres- 
idency of, 256 

Graham, Richard, 45 

Greater Carajas project, 193-94 

great leap forward period, 423-26 

Green Party (Partido Verde— PV), 305 

green-revolution technologies, 189-90 



green satellite, 452 

gross domestic product (GDP), 351; 
decline of, 182-83, 375; growth of, 69, 
83, 170, 172, 175, 181; services sector's 
share of, 201-2; share of mining in, 
193 

gross national product (GNP): contribu- 
tion of industry to, 159-60; military 
expenditures in, 336; share of primary 
sector in, 159 

Group of 77 (G-77), 322 

Guaira missions, 12 

Guaira Province, 12 

Guaram people: enslavement of, 12; mis- 
sions among, 1 1-12 
Guaram War (1756), 13 
Guararapes, Battle of, 23 
Guararapes Airport, 206 
Guarulhos Airport, 206 
guavas, 190 

gubernatorial election of 1994, 306-7 
Guevara, Ernesto "Che," 324 
Guianas, 91 

Guimaraes, Reinaldo, 424 
Guimaraes, Ulysses, 272, 282, 292 
Guinea-Bissau, 320; independence of, 
319 

Guyana, 91; Brazilian border with, 367- 
68 



habeas corpus: writs of, 274 
Habitat II, lv 

health care system, 139-42; applied sci- 
ence in, 418-19; indicators of health 
in, 136-37; infectious and chronic dis- 
eases in, 137-39; nutrition and diet in, 
139; professionals and resources in, 
142 

Health Law (Lei Organica de Saude) 
(1990): and access to medical care, 
139^40 

Heart Institute (Instituto do Coracao), 
439 

Hemming, John, 6 

Henriques, 338 

heterodox economic shocks, 177 
higher education. See education 
high-level personnel training: coordina- 
tion, 433 
Holanda, Sergio Buarque de, 18 
homelessness: issues of, lxxi-lxxii 



635 



Brazil: A Country Study 



homem cordial (cordial man), 128-29 
homosexuals: and acquired immune 

deficiency syndrome (AIDS), 138 
Hour of Truth (Hora da Verdade), 285 
housing, 144 

Housing Finance System (Sistema Finan- 
ceiro de Habitacao — SFH), 144 

human immunodeficiency virus (HIV), 
137 

Human Rights Commission, 408 

human rights movements, 120 

human rights violations, 404, 406, 408; 

crackdown on, Ixii-lxiii 
hydroelectric power (see also Itaipu Dam; 

Tucurui Dam), lvii, 90, 196; potential 

of, 95 
hyperinflation, lvii 

Iberian union, 21 
Ilha Sao Luis do Maranhao, 21 
Ilheus, 17; as deep-water port, 206 
illegitimacy, 118 

illiteracy, lxvii-lxviii; rate among blacks, 
lxx 

Imbituba: as deep-water port, 206 
Imeri Range, 91 

immigration: policy on, 317-18; subsidi- 
zation of, 66-67 

immunization: expanded coverage for, 
137 

Imperial Geological Commission, 418 
imperial mercantile policy of Portugal, 
159 

imperial science period, 417-18 
imports: approval rate of licenses, 239; 

controls of, 214; forced reduction in, 

233; growth of, 244; total value of, 172; 

value of, 214 
import-substitution industrialization, 5, 

168-71, 188, 195, 256; disincentives of, 

189 

income distribution, lx, 115-16; and fall 
in inflation, 232; inequality in, 185-87; 
and labor force, 180-87; and literacy, 
146; pattern of, 185-87; skewed, 404; 
unequalness of, 89 

income tax fugitives, 89 

Inconfidencia Mineira, 31-32 

independence, 40, 163 

independent labor movements, 152 

indexation: rise in, 229 



India: relations with, 322 

Indians. See Amerindians 

Indian Protection Service (Servico de 
Protecao aos Indios — SPI), 125; estab- 
lishment of, 61 

Indian Statute (1973), 125 

industrial base, lvi, 335 

industrial competitiveness: science for, 
428-30 

industrial sector: growth and moderniza- 
tion in, 172-73 

industries (see also specific industries): 
under Collor de Mello, 192-93; 
defense, 363-66 

infant mortality, 111, 136-37, 153 

infectious diseases, 137-39 

inflation, xciv, 215, 223; acceleration of, 
174, 176, 228-29; effect of, 222; effect 
of stabilization plan on, 178; fall in, 
177, 231-32; manipulating consumer 
prices to contain, 196; rate of, 74, 257; 
RealY>\zn for, 229-33; significance of 
double-digit, 228-29 

inflation tax, 229 

influenza: impact on Indian population, 
20 

informal economy, 117 
informal-sector employment, 183 
injunction: warrants of, 274 
inland waterways, 206 
Inquisition, 133 

Institute for Nuclear and Energy 
Research (Instituto de Pesquisas 
Energeticas e Nucleares — IPEN), 434, 
445, 446 

Institute for Research and Social Studies 

(Instituto de Pesquisas e Estudos Soci- 

ais— IPES),359 
Institute for Technological Research 

(Instituto de Pesquisas Tecnologicas — 

IPT),420,434 
Institute of Advanced Studies (Instituto 

de Estudos Avancados — IEAv) , 449 
Institute of Environmental Research on 

Amazonia (Instituto de Pesquisa 

Ambiental da Amazonia — IPAM), xci 
Institute of Identification, 401 
Institute of Mechanical Engineering 

(Instituto de Engenharia Mecanica), 

436, 439 

Institute of Pure and Applied Mathemat- 
ics (Instituto de Matematica Pura e 



636 



Index 



Aplicada— IMPA), 431, 439, 440 
Institute of Socioeconomic Studies 

(Instituto de Estudos Socio-Economi- 

cos— Inesc) , 309 
instruction session, 406 
Integrated Centers for Assistance to 

Children (Centros Integrados de 

Assistencia a Crianca — CAICs), 146- 

47 

intellectual property rights, 331 
intelligence services {see also Brazilian 
Intelligence Agency; National Intelli- 
gence Service): military role in, 358- 
62 

Inter-American Defense College, 393 
Inter-American Development Bank 

(IADB), 108, 436; Brazil participation 

in, 315 

Inter-American Peace Force (Forca 

Interamericana de Paz — FIP), 354; 

Brazilian participation in, 316; to 

Dominican Republic, 325 
Inter-American Treaty of Reciprocal 

Assistance (1947) (Rio Treaty), 316 
intercontinental ballistic missile (ICBM), 

458 

interest groups, 308-10 

intermediate goods: growth of, 170 

internal combustion engine, 6 

Internal Control Secretariat (Secretaria 
de Controle Interno— SCI) , 297 

Internal Operations Department-Inter- 
nal Defense Operations Center 
(Departamento de Operacoes Inter- 
nas-Centro de Operacoes de Defesa 
Interna— DOI-CODI), 359 

internal security, 336, 409 

Internal Security Mission (1964-85), 
346, 348-50 

International Atomic Energy Agency 
(IAEA) , lxxxvi, 329, 351 , 447 

International Coffee Organization, 319 

International Commodity Organization: 
Brazil's participation in, 315 

international conflicts, 352-54 

International Criminal Police Organiza- 
tion (Interpol), 401 

International Monetary Fund (IMF), 
314, 350; austerity program imposed 
by, 176; Brazil's participation in, 315 

International Relations Research Insti- 
tute (Instituto das Pesquisas das 



Relacoes Internacionais — IPRI) , 31 3- 
14 

International Telecommunications Sat- 
ellite Organization (Intelsat) , 208 

interpersonal relations, 129 

interregional migration, 101 

Interunion Parliamentary Advisory 
Department (Departamento Inter- 
sindical de Assessorial Parlamentar — 
DIAP), 308-9 

interwar years, 66 

intestinal parasites and mortality, 111 
intravenous drug users: and acquired 

immune deficiency syndrome 

(AIDS), 138 
Iran-Iraq War, 318, 366 
Iraq: conflict with Kuwait, 318; foreign 

relations with, lxxxvii, 318 
iron ore, 240 
irrigation, 96 

Isabel (princess-regent), 53 
Israel: foreign relations with, 318 
Itaipu, lvii; hydroelectric dam at, 81, 95, 
196 

Itamaraty. See Ministry of Foreign Affairs 

Japan: relations with, 322-23 
Japanese immigrants, 123-24 
Japan International Cooperation Agency 

(JICA),323 
Jardim Botanico, 36 
Jefferson, Thomas, 31 
jeito, 130 

Jesuits, 11-12, 12; Europeanization of 

Indians by, 18-20; expulsion of, 13, 28; 

settlement by, 12 
Jesus, Maria Quiteria de, 40 
Joao (prince-regent) , 32-34; death of, 43 
Joao IV (king of Portugal), 22 
Joao V (king of Portugal), 28 
Joao VI (king of Portugal), 36, 40, 338; 

and creation of Superior Military 

Court, 275 
Joaquina, Carlota, 32-33; 36 (queen) 
joblessness: issues of, lxxi-lxxii 
jogo do bicho, 150 

John Paul II (Pope) , lxxii, 134, 310 
Johnson, Lyndon B., 76, 354 
Joint Brazil-United States Defense Com- 
mission, 348 
Joint Chiefs of Staff, 264 



637 



Brazil: A Country Study 



Joint Declarations on Nuclear Policy of 

Foz do Iguacu, 449, 450 
Jomal do Brasil, 207, 312 
Jose I (king of Portugal): death of, 30 
judicial system (see also specific regional 

courts) , 273-77; shortcomings of, 404 
judicial warrant, 405 

Kardecian spiritualism, 134 
Kennedy, John R, 324 
Khrushchev, Nikita, 289 
kidnappings, lxii 

Kingdom of Portugal and Brazil (1815- 
21), 34-37 

Kissinger, Henry, 326-27 

Korean War, 324, 354 

Kraftwerk Union, 448 

Kruel, Amaury, 76-77 

Kubitschek, Juscelino, 73-74, 345; elec- 
tion of, 276; foreign relations under, 
324-25; inauguration of, 344; nuclear 
policy under, 445 

Kuwait: conflict with Iraq, 318; foreign 
relations with, 318 

Labatut, Pierre, 40, 338 
labor court system, 276 
labor force: and income levels, 180-87; 

women in, 118-20, 181 
labor movement: strikes in, 67; women 

in, 66-67 
Lacerda, Carlos, 75 

Lady of the Appearance (Nossa Senhora 

Aparecida), 133 
Lagoa Real/Caetite Mine, 201 
lagoons, 94 
lambada, 130 
Lampiao, 150 

land concentration: issues of, lxxi-lxxii 

Land Law (1850), 45, 46 

Landless Movement (Movimento dos 

Sem-Terra — MST) , lxxi-lxxii 
landlessness: issues of, lxxi-lxxii 
land reform, 126 
land tenure, 126 

languages, 130-31; Amerindian, 125; 

families of, 7 
latifundia: establishment of, 16 
Latin America: relations with countries 

in, 315-16 



Latin American Bishops' Conference, 
134 

Latin American Free Trade Association 
(LAFTA), 242; replacement of, by 
Associacao Latino-Americana de Inte- 
gracao (ALADI), 247 

Latin American Integration Association 
(LAIA),242 

laws: army's mission, 367; Congressional 
Resolutions, 218, 220, 238; elections, 
290, 300-1; family planning, 114; 
financial capital flows, 218; political 
parties, 291; private loans, 220; tariffs, 
234 

League of Nations, 352; Brazil as found- 
ing member of, 315 
Le Due Ann, 323 
legislature, 56, 265, 268-73, 335 
lemons, 190 

Leopoldina (archduchess) , 34 
leprosy, 138 

Lerner, Jaime, lv, 285, 307 

Liberal Alliance, 343 

Liberal Front Party (Partido da Frente 

Liberal— PFL), 259, 270, 281, 283-84, 

287, 289,291,304, 307 
Liberal Party (Partido Liberal — PL), 

287, 304 

Liberation Alliance (Alianca Liberta- 

dora), 342 
liberation theology, lxix, 127, 134 
libraries: principal research, 149 
Library of Congress of Brazil (Biblioteca 

do Congresso do Brasil), 149 
Libya: foreign relations with, 318 
Licensing and Control Superin tendency 
(Superintendencia de Licenciamento 
e Controle— SLC), 446 
life expectancy: at birth, 111; improve- 
ment in, 74; of men and women, 111 
Light Metal, Inc. (Metal Leve S.A.), 439- 
40 

Lima, Manuel de Oliveira, 40 
Linz, Juan J., 79 
Lisboa, Antonio Francisco, 26 
literacy and illiteracy, 145-46 
livestock (see also cattle industry), 63 
livestock sector: modernization of, 190- 
91 

living standards, 101-2; in Center- West, 
103 

lobbying process, 310-1 1 



638 



Index 



location, 90-91 

London Interbank Offered Rate 

(LIBOR), 219 
Lopez, Francisco Solano: resistance of 

expansion by, 339^10 
Lott, Henrique Teixeira, 344, 345 
Loyola, Ignatius, 19 

Luanda, 22; Brazilian embassy in, 319; 

Dutch seizure of, 4 
Lula. SeeSilva, Luis Inacio "Lula" da 
lumber industry, 63, 100 
Luso-Brazilians, 37 
Lusophone, 320 

Lutzemberger, Jose: as secretary of envi- 
ronment, 107 

Macapa: military bases at, 368 
Macedo, Edir, 207 
machismo, 128 
macroeconomic policies, 154 
macumba, 134 

magazines: circulation of, 312 
mahogany, 97 

majority elections: types of, 301-2 
Malan, Pedro, lxxv 
malaria, 66, 138, 139 
malnutrition, 139 

Maluf, Paulo, lxxxiv, 282, 291, 307-8 
Mamore-Guapore Basin, 11; settlement 
of, 12 

Manaus, 101; as deep-water port, 206; 

fortifications at, 1 3; population of, liv; 

tourism in, 208 
Manchete, 207 
mangoes, 190 
mangroves, 94 

Manguinhos Institute (Instituto Man- 

guinhos), 419 
manioc (cassava), 190 
manufacturing. See industries 
Maraba, 202 

Maranhao (state), 40, 101; ranching in, 

26; settlement of, 11 
Marcovitch, Jacques, 439, 440 
Mardi Gras Carnaval, 208; festivities, 90, 

130 

marginality, 58 
Maria I (queen), 32 
Mariana, 24 
Marinho, Irineu, 312 
Marinho, Roberto, 207, 312 



marital separation, 132 
market competitiveness, versus protec- 
tionism, 444 
Martins, Jose de Souza, lxxi 
Martin Vaz, 91 

Martius, Karl Frederich Philipp von, 9 
Massachusetts Institute of Technology, 
423 

mass communications, 131-32 
mat a, 101 

maternal mortality rate, 114 

Mato Grosso do Sul (state), 103; Amerin- 
dian population in, 126; Captaincy of, 
13; environment in, 108; settlement 
of, 4, 12; state banks in, 278 

Mato Grosso swamplands (Pantanal 
Matogrossense), 96 

Matta, Roberto da, 129 

Maximilian: collapse of monarchy of, 
49-50 

mayors, 278-79 

Mborore, Battle of, 12 

McCann, Frank D., 389 

measles, 137, 139; impact on Indian pop- 
ulation, 20; and mortality, 111 

media, 311-12 

Medici, Emilio Garrastazu, 78, 80-81, 
346; foreign relations under, 319, 326 
Medoza Declaration, xci-xcii 
Mendes, Chico, lxxii, 150 
Mendes, Ivan Souza, 292, 350 
Mendes Junior, 318 
Mendonca, Salvador de, 57 
Menem, Carlos Saul (Argentina), 450 
Mengele, Josef, lxxxvi 
merchant marine, 206-7 
meso-regions, 99 
mestres de campo, 338 
metals, 161 

Methuen Treaty (1703), 27 
Metropolitan Regions (MRs): popula- 
tion of, 186 
Metro service, 205 
microregions, 99 

microwave radio-relay facilities, 207 
middle class, 117 

Middle East: Brazil's relationship with, 

317-18; trade with, 241 
migration: interregional, 101; rural to 

urban, 126; and urbanization, 114-15 
Military Assistance Agreement (1952), 

356 



639 



Brazil: A Country Study 



military coup. Seecowp{s) d'etat 
Military Engineering Institute (Institute" 

Militar de Engenharia— IME) , 392 
military expenditures: Brazil's rate of, 

336 

Military Police (Policia Militar — PM), 
401, 409; jurisdiction of, 275; tensions 
between Civil Police and, 406; women 
in, 400; Women's Company, 402 

military prisons, 408 

military regime, 90; elements guiding, 
335 

military republic (1964-85), 78-84 

military role: in Amazon, 367-70, 372; in 
civic-action projects, 374-75; in 
counter-drug actions, 372-74; in intel- 
ligence services, 358-62; in society 
and government, 337-52 

military schools, ^education 

military service: obligatory, 341; resis- 
tance of Brazilians to, 61-62 

Minas Conspiracy, 31-32 

Minas Gerais (state), 5, 102, 257, 268, 
343; culture in, 26; local government 
in, 287; manufacturing in, 29; and 
migration, 114; political parties in, 
280, 281, 289, 290; politics in, 259; 
population of, 24, 25, 110; research 
institutes in, 446; science and technol- 
ogy in, 434; settlement of, 4; volatility 
in, 255 

Minas Gerais (aircraft carrier), 383, 384 
Minas Gerais Iron and Steel Mills, Inc. 

(Usinas Siderurgicas de Minas Gerais 

S.A.— Usiminas) , 212 
mineral policy, 194-95 
mineral production: value of, 193-95 
Mineral Technology Center (Centro de 

Tecnologia Mineral — Cetem), 431 
mineral wealth: level of, 193-95 
minimum wage: average real, 1 83-84 
mining companies: and railroad opera- 
tion, 205 
Ministry of Agriculture, 426 
Ministry of Economy: unification of, 

with Ministry of Planning, 426-27 
Ministry of Environment, 107 
Ministry of Environment and the Legal 

Amazon, 107, 370 
Ministry of Environment, Hydraulic 

Resources, and the Legal Amazon, 

107, 370, 372 



Ministry of Finance, 311 

Ministry of Foreign Affairs (Itamaraty), 

65,313-15 
Ministry of Health, 114, 139-40 
Ministry of Planning, 424; unification of, 

with Ministry of Economy, 426-27 
Ministry of Science and Technology, 

430; Funding Authority for Studies 

and Projects, 433; organization of, 432 
Ministry of Social Security, 143 
minors: protection by legal system, 121- 

22 

Miranda, Carmen, 89 

miscegenation, 125 

missile programs, 458-60 

Missile Technology Control Regime 

(MTCR), 329, 330, 336, 351, 457, 458; 

Brazil's participation in, 315; signing 

of, xcii 

mission settlements: of Spain, 11 
Mitre, Bartolome, 48 
moderating power, 255 
modernist movement, 128 
Mojos: setdement of, 1 2 
monazite, 445 

monetary correction ( corregdo monetaria) 

system, 228 
money laundering, lxxxix; law, xciv 
Monteiro, Pedro Aurelio de Goes, 70 
Montevideo, Treaty of (1960), 241 
Moog, Viana, 129 

Morais e Barros, Prudente Jose de (Pru- 
dente de Morais): as president, 341 

Moreira da Costa Robeiro, Delphim, 342 

mortality: declines in, 110-11; infant, 
136-37; maternal rate, 114 

motor-driven farming machines: produc- 
tion of, 160 

Motta, Sergio, 311 

Mozambique: relations with, 320; United 
Nations mission in, 315; United 
Nations peacekeeping operations in, 
354 

multilateral relations, 315 
multiple-launch rocket systems (MLRS) , 
364 

multipolarity: transformation from bipo- 

larity to, 357 
Municipal Accounts Court (Tribunal de 

Contas Municipais — TCM), 273 
municipal elections: of 1992, 304; of 

1996, 307-8 



640 



Index 



municipalities, 99; city councils for, 265; 
elections in, 265; law of, 262 

Museum of Astronomy and Related Sci- 
ences (Museu de Astronomia e Cien- 
cias Anns— MAST) , 431 

Museum of Natural History, 418 

music, 89, 130; Brazilian funk in, liii 

Mussolini, Benito, 255 

Namibia: independence of, 320; United 

Nations mission in, 314 
Napoleonic Wars, 32, 40, 163 
Nascimento, Edson Arantes do (Pele), 

liii — liv 

National Accounts Court (Tribunal de 
Contas da Uniao — TCU), lxxiv; 
appointment of woman to, 298-99; 
recruitment criteria for, 272-73 

National Aeronautics and Space Admin- 
istration (NASA), 456 

National Astrophysics Laboratory (Labo- 
ratorio Nacional de Astrofisica — 
LNA),431 

National Bank for Economic and Social 
Development (Banco Nacional de 
Desenvolvimento Economico e 
Social— BNDES), 424 

National Commission for Space Activi- 
ties (Commissao Nacional de Ativida- 
des Espaciais — CNAE), 454-55 

National Computer Science Laboratory 
(Laboratorio Nacional de Com- 
putacao Cientifica— LNCC), 431 

National Confederation of Industry 
(Confederacao Nacional das Indus- 
trias— CNI), 309 

National Conference of Brazilian Bish- 
ops (Conferencia Nacional dos Bispos 
do Brasil— CNBB), 122, 133, 310 

National Congress (Congresso Nacio- 
nal). See legislature 

National Constituent Assembly (Assem- 
bleia Nacional Constituinte — ANC), 
280-81, 292, 308; and drafting of new 
constitution, 260-62 

National Council for Scientific and Tech- 
nological Development (Conselho 
Nacional de Desenvolvimento Cienti- 
fico e Technologico— CNPq), 422, 
423, 429, 431, 433; activities of, 433; 
resources of, 430; responsibilities of, 



433-34; as source of research grants, 
436 

National Council of Criminal and Prison 
Policy (Conselho Nacional de Politica 
Criminal e Penitenciaria — CNPCP), 
408 

National Council of Public Security 

(Conselho Nacional de Seguranca 

Publica— Conasp) , 401-2 
National Council on Women's Rights 

(Conselho Nacional de Direitos da 

Mulher— CNDM), 120 
National Defense Council (Conselho de 

Defesa Nacional— CDN) , 367, 377 
National Defense Plan (Piano de Defesa 

Nacional — PDN) , lxxxviii 
National Democratic Union (Uniao 

Democratica Nacional — UDN), 279, 

280, 291 

National Economic Development Bank 
(Banco Nacional de Desenvolvimento 
Economico— BNDE) , 212 

National Environmental Council (Con- 
selho Nacional do Meio Ambiente — 
Conama), 105 

National Environmental Fund (Fundo 
Nacional do Meio Ambiente — 
FNMA), 108 

National Environmental Plan (Piano 
Nacional do Meio Ambiente — 
PNMA), 108 

National Environment Policy (1981), 
105 

National Fund for Scientific and Tech- 
nological Development (Fundo Nacio- 
nal de Desenvolvimento Cientffico e 
Tecnologico— FNDCT), 424; budget 
of, 429 

National Guard: formation of, 338 

National Housing Bank (Banco Nacio- 
nal de Habitacao— BNH), 144 

National Immunization Program, 137 

National Indian Foundation (Fundacao 
Nacional do Indio — Funai), lxv, 125 

National Institute for Medical Assistance 
and Social Security (Instituto Nacio- 
nal de Assistencia Medica da Previden- 
cia Social— INAMPS), 140 

National Institute of Amazon Region 
Research (Instituto Nacional de Pes- 
quisas da Amazonia — INPA) , xciv, 430 

National Institute of Criminology, 401 



641 



Brazil: A Country Study 



National Institute of Space Research 
(Instituto Nacional de Pesquisas Espa- 
ciais— INPE), lxiv, xc, 430, 453 

National Institute of Technology (Insti- 
tuto Nacional de Tecnologia — INT), 
420, 430 

National Intelligence Service (Servico 
Nacional de Informacoes — SNI), 
lxxxvi-lxxxvii, 292, 329, 350, 358-59 

National Iron and Steel Company (Com- 
panhia Siderurgica Nacional — CSN), 
420 

Nationalist China: relations with, 322 
National Lawyers' Association (Asso- 

ciacao Nacional dos Advogados), 120 
National Library (Biblioteca Nacional), 

149 

National Nuclear Energy Commission 
(Comissao Nacional de Energia 
Nuclear— CNEN), 422, 445-46 

National Observatory (Observatorio 
Nacional— ON), 431 

National Order Redefinition Party 
(Partido da Redefinicao da Ordem 
Nacional — Prona), 304-5 

national parks, 105 

National Police Academy, 401 

National Privatization Program (Pro- 
grama Nacional de Desestatizacao — 
PND),212 

National Program for Human Resource 
Training for Technological Develop- 
ment (Programa Nacional de Capaci- 
tacao de Recursos Humanos para o 
Desenvolvimento Tecnologico — 
RHAE), 431 

National Reconstruction Party (Partido 
da Reconstrucao Nacional — PRN), 
276, 287-88, 303, 305 

National Renewal Alliance (Alianca 
Renovadora Nacional — Arena), 280, 
292; origin of, 279 

National Research Council (Conselho 
Nacional de Pesquisas — CNPq), 71, 
422 

National Sanitation Plan (Piano Nacio- 
nal de Saneamento — Planasa), 143 

National Secretariat of Human Rights 
(Secretaria Nacional dos Direitos 
Humanos — SNDH), lxii 

National Secretary of Tourism and Ser- 
vices, 209 



national security: and the future, 409-10 
National Security Council (Conselho de 
Seguranca Nacional — CSN), lxxix- 
lxxx, lxxxvi-lxxxvii, 314, 329, 449, 454 
national security doctrine: elements of, 
335 

National Security Law, 293 
National Social Control Commission, 
311 

National Street Children's Movement, 
122 

National Syncrotron Light Laboratory 

(Laboratorio Nacional de Luz Sin- 

crotron— LNLS), 431 
National System for the Environment 

(Sistema Nacional do Meio Ambi- 

ente — Sisnama), 105 
national territory, 91 
National Tourism Board, 209 
natural gas, 200; state-held monopolies 

on distribution of, 298 
natural resources, lvi-lvii 
natural wonders, 208 
Nature Conservancy, 108 
Naval Academy (Escola Naval — EN), 392 
Naval Intelligence Center (Centro de 

Informacoes de Marinha — Cenimar), 

359 

Naval Postgraduate School, 392 

Naval Research Institute (Instituto de 
Pesquisas Navales— IPqN) , 392 

Naval School (Escola Naval— EN), 391 

Naval War College (Escola de Guerra 
Naval— EGN), 392 

navy, 375, 381, 383-84; size of, 336 

neoliberal economic model, 410 

net private saving, 214-15 

Neves, Lucas Moreira, 310 

Neves, Tancredo de Almeida, 76, 280, 
282, 283, 291; and armed forces, 293; 
death of, 83-84, 265,292 

New Christian (Jewish converts) inves- 
tors, 14-15 

news media, lv 

newspapers: circulation of, 312 

Niemeyer, Oscar, lx 

Nippon Usiminas, 212-13 

Nixon, Richard M., 326; relations with 

Brazil under administration of, 326- 

27 

noncommissioned officer (NCO) corps, 
379 



642 



Index 



nondurable consumer goods: growth of, 
170 

nonforest products, 100 
nongovernmental organizations 

(NGOs), 152, 309, 370; environmental 

causes, 107-8 
noninterest-related surplus: level of, 222 
Non-Proliferation Treaty (NPT), 326, 

450-51; Brazil's participation in, xcii, 

315 

Noronha, Fernando de, 353 

North: literacy in, 146; medical access in, 
142; mortality in, 111; population in, 
109,110 

North America: trade with, 241 

North American Free Trade Agreement 
(NAFTA), 240, 241, 246, 317; Brazil's 
entrance into, 246 

Northeast, 101-2; climate in, 98; educa- 
tion in, 147; literacy in, 146; medical 
access in, 142; mortality in, 111; popu- 
lation in, 109 

Northern Corridor (Calha Norte) 
project, 336, 367, 376 

Northwest (Maranhao): Amerindian 
population in, 126 

Novo Estado, 57, 68, 69, 345, 346 

Nuclear Engineering Institute (Instituto 
de Engenharia Nuclear — IEN) , 446 

nuclear power, 200-1 

nuclear programs, 445-52 

nuclear proliferation, 357 

nuclear rivalry: issue of, 449 

Nujoma, Sam, 320 

nutrition: and diet, 139, 153 



Obidos: fortifications at, 13 
Obligatory Military Service Law, 61-62 
O Estado de Sao Paulo, 31 2 
Office of the Federal Attorney General 

(Advocacia Geral da Uniao — AGU) , 

277 

Office of the Solicitor General of the 

Republic (Procuradoria Geral da 

Republica— PGR) , 276-77 
Officer's Complementary Corps 

(Quadro Complementar de Oficiais — 

QCO) , 399 
Officers Training School (Escola de 

Aperfeicoamento de Oficiais — EsAO) , 

392 



OGlobo, 312 

oil {see also petroleum): crises of 1970s 
in, 197; dependency on imported, 82; 
rise in world prices, 234 

oil shock, 1 74 

Old Republic, 277-78 

Oliveira, Dante de, 285, 307 

open-list system, 269 

Operation Desert Storm, 318, 364 

Operation Panamerica, 324 

Operation Surumu, 368-69 

Option of the Left (Opcao de 
Esquerda), 285 

oral contraceptives, 113 

oranges, 190 

Orbital Aerospace Systems, Inc. (Orbita 
Sistemas Aeroespaciais S A.) , 459-60 

Order of Evangelical Ministers (Ordem 
dos Ministros Evangelicos — OME), 
310 

Orellana, Francisco de, 11 
Organization of American States (OAS), 

346, 354; Brazil's participation in, 315; 

expulsion of Cuba from, 325 
organized labor: earnings of, 1 84 
Osorio, Manuel Luis, 51 
Osorio project, 364 

Oswaldo Cruz Foundation (Fundacao 

Oswaldo Cruz), 419, 420, 434 
Ouro Preto, 24, 33; tourism in, 208 
out-migration, 101 
Overseas Council, 12, 28 



Pacaraima Range, 91 
Pacheco, Carlos Annibal, 368 
Pact for Childhood, 122 
padroado, 50-51 
pagode, 1 30 

Palheta, Francisco de Melo, 12 

pampa grasslands, 103 

Pan-Americanism, 65-66 

Pantanal (Great Wetlands) of Mato 
Grosso, Ivi-lvii, lxiii, 95, 103, 208 

paper: production of, 160 

Para (state), 99, 101; Amerindian popu- 
lation in, 126; hydroelectricity in, 95; 
massacres of landless workers in, 150; 
settlement of, 11; timber extraction in, 
97 

Paracatu, 33 

Paragominas: timber extraction in, 97 



643 



Brazil: A Country Study 



Paraguay, 91; foreign relations with, 316; 

and Treaty of Asuncion, 245 
Paraguayan War (1864-70), 13, 51, 52, 

149, 375; Brazil's involvement in, 339- 

40 

Parafba (state), 101, 343; political parties 
in, 290; settlement of, 11 

Parallel Program (Programa Paralelo), 
lxxxvi, 335,425,429,449 

Parana (state), 102; hydroelectric poten- 
tial of, 95; and migration, 114; politi- 
cal parties in, 280, 290; population in, 
110; settlement of, 3-4; soils in, 96 

Paranagua: as deep-water port, 206 

Parana Military Police, 63 

Paranhos, Jose Maria da Silva (Baron of 
Rio Branco), 64 

Parati: overland trails from, 26 

pardos, 338 

passion fruit, 190 

Pastoral Land Commission (Comissao 

Pastoral da Terra— CPT) , lxxiii 
patent protection law, 331 
Patents Law (1996), lxxxv-lxxxvi 
paternalism, 116, 128 
Paulista expeditions, 20 
Paulista revolt (1932), 68 
Paulistas: discovery of gold by, 24 
Paulo Afonso: hydroelectricity in, 95 
peacekeeping operations. See United 

Nations 
peanuts, 190 
Pefanha, Nilo, 64 

Pedro (crown prince) {see also Pedro I), 
34, 36; renunciation of his right to 
Portuguese throne, 43 

Pedro I, Dom, 37-43, 43, 338; death of, 
44 

Pedro II, Dom, 33, 43, 45, 52, 340; coro- 
nation of, 255; coup overturning, 54; 
science and technology policy under, 
418 

Peixoto, Floriano Viera, 56, 57; assump- 
tion of presidency, 340-41; illness and 
death of, 58; as vice president, 340 

Pele. SeeNascimento, Edson Arantes do 

Pena, Afonso, 64 

Penal Code, 404-6, 408 

penal institutions, 408-9 

Penedos de Sao Pedro e Sao Paulo, 91 

People's Electoral Movement (Movi- 
mento Eleitoral do Povo— MEP) , 285- 



86 

per capita income, lxvii, lxxiii, 101, 102, 

103, 116, 185-86 
perinatal conditions, 1 37 
Pernambuccan revolution (1817), 34- 

35, 35 

Pernambuco (state), 22, 101; Dutch cap- 
ture of, 22; political parties in, 289; 
ranching in, 26; settlement of, 4, 10 

Pernambuco Province: affluence of, 16 

Persian Gulf War, 354 

pertussis, 137 

Peru, 91: foreign relations with, 317 

Pessoa, Epitacio da Silva, 342 

Petrobras International Trade, Inc. 
(Petrobras Comercio Internacional 
S.A — Interbras), 320 

Petrobras's Research and Development 
Center (Centro de Pesquisa e Desen- 
volvimento— Cenpes) , 437-38, 439 

petrochemicals: production of, 160 

petroleum {see also oil), 197-200; growth 
of industry, 6; production of, 1 60 

Petropolis: military bases at, 368 

Philip II (king of Spain, Naples, and Sic- 
ily) , 21 

Philip IV (king of Spain, Naples, and Sic- 
ily) , 22 

physical setting: climate, 97-99; environ- 
ment, 103-9; geographic regions, 99- 
103; geology, geomorphology, and 
drainage, 91, 94-95; size and location, 
90-91; soils and vegetation, 95-97 

Piaui (state), 101; political parties in, 
290; ranching in, 26 

Pilot Program for the Conservation of 
the Brazilian Rain Forests (Programa 
Piloto para a Protecao das Florestas 
Tropicais do Brasil— PPG-7) , 108 

pinewoods, 96 

Pinheiro, Paulo Sergio, 403 

Pinto, Magalhaes, 280 

piped water, 153 

Piranha missile (MAA-1) project, 318, 

329, 456 
Piva, Hugo Oliveira, 318 
Planalto Central, 94 

Pofos de Caldas, 201; research institutes 

in, 446 
police corruption, lxii-lxiii 
poliomyelitis, 137 

Political Action Evangelical Group 



644 



Index 



(Grupo Evangelico de Acao Polftica — 
GEAP), 310 

Political Council (Conselho Politico), 
creation of, 264 

political culture, 257-59 

political liberalization, 83 

political party system, 256; historical ori- 
gins and evolution, 279-81; legisla- 
tion, 290-91; major parties in 
Congress, 281-87; minor parties in 
Congress, 287-89; registration, 290; 
regional strength of, 289-90 

politics: women in, lxxi, 298-300 

Pombal, Marques de (Count Sebastiao 
Jose de Carvalho e Melo), 28-29; 
reforms of 337-38 

Pontifical Catholic University of Rio de 
Janeiro (Pontiffcia Universidade 
Catolica do Rio de Janeiro— PUC-RJ) , 
148 

poor {see a Iso poverty) : concentration of, 

160; rural, 116 
Popular Action (Acao Popular — AP), 

286 

Popular Movement for the Liberation of 
Angola (Movimento Popular de Liber- 
tacao de Angola— MPLA) , 319 

Popular Party (Partido Popular — PP), 
280, 281 

Popular Socialist Party (Partido Popular 
Socialista— PPS), 288, 305 

population, liv, 89; Amerindian, 124-26; 
density of, 109; fertility, 111-14; 
growth of, 74; indigenous, 6-9; migra- 
tion and urbanization, 114-15; mor- 
tality, 110-11; in North, 101; in 
Northwest, 101; rate of growth, 159; 
rural, 126; size and distribution, 109- 
10; urban, 114-15 

pork: growth of, 191 

Porto Alegre, 102; climate in, 98; as 
deep-water port, 206; judicial system 
under, 275; population of, 186; 
Regional Federal Court (Tribunal 
Regional Federal— TRF) in, 275 

Porto Seguro, 6, 14, 17 

ports, 206 

Portugal: conquest of Brazil by, 6-9; 
imperial mercantile policy of, 159; 
signing of Methuen Treaty (1703) 
with, 27; trade routes of, 160-61 

Portuguese, 123, 130-31; early coloniza- 



tion by, 14-21; empire of, 10-11; 
exploration and settlement by, 7-8; 
exploration and settlements by, 3-4, 
13-14; use of military force by, 337 

Portuguese African colonies: renuncia- 
tion of future annexation of, 40 

Portuguese-Speaking African Countries 
(Paises Africanos de Lingua Oficial 
Portuguesa— PALOP), 320 

positivism, 127, 340 

Postal and Telegraph Company 

(Empresa de Correios e Telegrafos — 

ECT), 131 
post-Vargas republic (1954-64), 72-78 
poultry subsector: improvements in, 191 
poverty {see also poor), lxvi-lxvii, lxviii, 

116; feminization of, 120; urban, 116 
Power Services, Inc. (Servicos de Eletri- 

cidade S A. — Light) , lxxix 
Prado Junior, Caio, 8 
pre-Amazon forest, 101 
Precambrian crystalline shields, 91 
precipitation levels, 98-99 
preference polls: impact of RealPlan on, 

306 

presidency, 263-65 

presidential election: of 1989, 302-3; 
first direct, 350-51 

presidents: powers of, 265; term of office 
for, 264, 302 

Prestes, Luis Carlos, 279, 288, 307, 342 

Prestes Column, 342 

primary schools, 146-47 

private sector: technological research 
in, 438-39 

privatization, 209, 212-13, 250; under 
Cardoso, Ixxix-lxxxi; of state-owned 
enterprises, 212-13 

professional groups, 309 

Program for Competitiveness and Tech- 
nological Diffusion (Programa de 
Apoio a Competividade e Difusao Tec- 
nologica— PCDT), 431 

Program in Support of Scientific and 
Technological Development (Pro- 
grama de Apoio ao Desenvolvimento 
Cientlfico e Tecnologico — PADCT), 
428-29, 434 

Progressive Party (Partido Progressista — 
PP),287 

Progressive Renewal Party (Partido Pro- 
gressista Renovador— PPR), 281 



645 



Brazil: A Country Study 



Progressive Unity Movement (Movi- 
mento de Unidade Progressista — 
MUP), 286 

Pro-Nature Foundation (Fundacao 
Pro-Natureza — Funatura) , 1 07 

propane, 197 

proportional representation elections, 
302 

prostitution, lxvi, 118 

protectionism: versus market competi- 
tiveness, 444 

protein consumption, 153 

Protestantism, 134, 136 

provisional measure {medida provisoria — 
MP), 261 

public debt: overhang of, 222 

public employees: tenure for, 226-27 

public health, 141-42; expenditures on, 
141; housing, 144; sanitation and pub- 
lic utilities, 143-44; Social Security, 
143 

public ministry, 276-77 
public opinion: changes in, 258 
public policies: regarding environment, 
105, 107 

public sector: decline in finances, 225; 
disequilibrium in, 178; pressures on 
expenditures of, 224-27; reduction of 
deficit in, 249-50; role of, in economy, 
221-22; saving in, 214 

Public Sector Borrowing Requirement 
(PSBR),224 

Purus, 94 



Quadripartite agreement (1991): ratifi- 
cation of, 451 

Quadros, Janio, 292, 345, 401; adminis- 
trations of, 74-76; foreign relations 
under, 319, 322, 324; nuclear policy 
under, 445; resignation of, 265 

Quercia, Orestes, 282-83, 299, 305 

queimadas, xciv 

quilombos, 26 

race: and ethnicity, lxx, 122-24 
Radiation Protection and Dosimetry 
Institute (Instituto de Radioprotecao 
e Dosimetria — IRD) , 446 
Radical Democracy (Democracia Radi- 
cal), 285 



Radiobras, 207 
radio stations, 131-32 
ragamuffins, 44 

railroads, 202, 205; construction of, 164; 

in increasing trade, 46-47 
rain forest, 96, 99 
Ramalho,Joao, 16 
ranching: development of, 26-27 
Raytheon Company, lxxxix, xc, 330 
Reagan, Ronald, 357; Brazilian relations 

under administration of, 328-29 
real income: average household, 186-87 
RealFlan, lxxv, lxxxi-lxxxiii, xciv, 229- 

33, 286; impact of, on preference 

polls, 306 

Real Value Units (Unidades Reais de 
Valor— URV), 230; congressional 
approval of, 305-6 

recession, lxxii-lxxiii 

Recife, 101; climate in, 98; as deep-water 
port, 206; Dutch seizure of, 4; judicial 
system under, 275; population of, 186; 
Regional Federal Court (Tribunal 
Regional Federal— TRF) in, 275; sub- 
ways in, 205 

Rede Globo de Televisao (World Net- 
work) , Iv 

Reformist officers, 341-42 

refrigerators: production of, 1 60 

regency era (1831-40), 43 

regional economic integration: and 
trade patterns, 240-48 

Regional Electoral Court (Tribunal 
Regional Eleitoral— TRE) , 275 

Regional Federal Court (Tribunal 
Regional Federal— TRF) , 273, 274-75 

Regional Labor Court (Tribunal 
Regional do Trabalho — TRT) , 276 

religion: lxix-lxx; macumba, 134; Protes- 
tantism, 134, 136; Roman Catholicism, 
132-34; syncretism, 134 

religious groups, 310 

Remote Sensing Satellite (Satelite de 
Sensoriamento Remoto — SSR-1), 453 

Reno, Janet, 373 

representative democracy: return of, 
259-60 

republican era (1889-1985), 54-84 
Republic of the Oligarchies (Republica 

das Oligarquias) , 341 
research and development, 435-44; his- 
torical evolution of institutions, 417- 



646 



Index 



27; in state-owned corporations, 437- 

38; in universities, 436-37 
Research and Development Center 

(Centro de Pesquisa e Desenvolvi- 

mento— CPqD) , 437 
research grants, 431 
research libraries, 149 
respiratory diseases: and mortality, 111 
retired persons, 122 
retirement, 143 

revolution of 1930, 166-67, 341-44 
Rezende, Iris, 299 
Rhodia-Poulenc, 440 
Ribeiro, Darcy, 124 
rice, 190 

Ricupero, Rubens, 370, 372 

Rio Amazonas. See Amazon River 

Rio Branco: fortifications at, 13; military 

bases at, 368 
Rio Branco, Baron of. See Paranhos, Jose 

Maria de Silva 
Rio Branco Institute (Instituto Rio 

Branco— IRBr), 313 
Rio Buranhem, 14 

Rio das Velhas: discoveries of alluvial 
gold on, 4 

Rio de Janeiro (state and capital), 5, 89, 
102, 257; climate in, 98; coffee houses 
in, 36; crime in, 404; as deep-water 
port, 206; education in, 417; electricity 
used in, 448; employment of women 
in, 118-19; favelas in, 150; founding 
of, 21; growth of, liv; judicial system in, 
275; local government in, 287; and 
migration, 114, 259; political parties 
in, 281; population in, liv, 110, 159, 
186; poverty in, lxviii-lxix, 187; 
Regional Federal Court (Tribunal 
Regional Federal— TRF) in, 275; 
research and development in, 422, 
431, 439-40, 447; sanitation in, 418; 
science and technology in, 434; size 
of, 89; state banks in, 278; subways in, 
205; tourism in, 208; violence in, lxi- 
lxii; wages in, 119 

Rio de Janeiro Airport, 206 

Rio de Janeiro's Military Club (Clube 
Militar): founding of, 340 

Rio de Janeiro State Bank (Banco do 
Estado de Rio de Janeiro — Banerj): 
sale of, lxxxi 

Rio de la Plata, 13, 15; Spain's creation 



of the Viceroyalty of, 29 

Rio de la Plata Basin, 94 

Rio Doce Valley Company, Inc. (Com- 
panhia Vale do Rio Doce— CVRD), 
lxxix, 195,212,213, 297 

Rio Earth Summit {see also Eco-92) , 209 

Rio Grande (city): as deep-water port, 
206; political parties in, 289 

Rio Grande do Norte (state), 101; politi- 
cal parties in, 290 

Rio Grande do Sul (state), 102, 103, 343; 
civil war in, 57; climate in, 98; early set- 
dement of, 3-4; irrigation in, 96; 1924 
uprising in, 342; political parties in, 
281; population in, 110; ranching in, 
26; settlement of, 5; to Sorocaba, 26; 
volatility in, 255 

Rio Grande do Sul Airline (Viacao Aerea 
Rio-Grandense do Sul— Varig) , 320 

Rio Guapore, 13 

Rio Ivai, 12 

Riojapura, 94 

Riojari, 94 

Riojavari, 94 

Rio Jequitinhonha: growth of diamond 

mining along, 4-5 
Rio Jurua, 94 
Rio Madeira, 15, 94 
Rio Mamore, 13 
Rio Negro, 94 

Rio Negro: fortifications at, 13 

Rio Paraguai: settlement of, 12; headwa- 
ters of, 13, 94-95,206 

Rio Parana, 94, 196, 206; navigation of, 
95 

Rio Sao Francisco, 206; navigation of, 95; 
system, 94 

Rio Solimoes, 94, 449; Amerindian pop- 
ulation in, 125 
Rio Tapajos, 94 
Rio Tiete, 206 
Rio Tocantins, 94 
Rio Ucayali, 94 
Rio Xingu, 94 
river systems, 94 

roads, 202; construction of, 6, 189; 
growth of programs for construction 
of, 195 

Roman Catholic Church, liv, lxix-lxx, 
lxxii-lxxiii, 132-34, 310; influence of, 
114; and land ownership, lxxii; and 
organization of Young Catholic Work- 



647 



Brazil: A Country Study 



ers, 67; role of, in the republic, 55; 
television broadcasting by, 207; and 
Vatican Council I, 50 

Rondon, Marechal Candido, 125 

Rondonia (state), 99, 100, 101; Amerin- 
dian population in, 125-26; environ- 
ment in, 108; massacres of landless 
workers in, 150 

Roosevelt, Anna C, lxv 

Roraima (state), 99; Amerindians in, 
xciv, 125; creation of, 261, 304; draft- 
ing of constitution, 262; fire in, xciv 

Rosa.Joao Guimaraes, 129 

Rosas, Juan Manuel de, 46, 339 

Royal Police Guard, 33 

rubber, 100, 164; production of, 5 

rural bandits, 150 

rural groups, 126 

Ruralist Democratic Union (Uniao 
Democratica Ruralista — UDR) , lxxii 

rural poor, 116 

rural population, 101-2 

rural-urban migration, 258 

Rwanda-Uganda: United Nations peace- 
keeping operations in, 354 

Sa, Mem de, 20, 21 
Saad, Joao Jorge, 207 
Sahara, 24 

Sabinada Rebellion, 44 
salary: average, Ixviii 

Sales, Manuel Ferraz de Campos, 59; as 

president, 341 
Salvador, 5, 101; climate in, 98, 99; as 

deep-water port, 206; population of, 

186; tourism in, 208 
Salvationist Movement, 62, 64 
samba, 89 

sanitation, 138; lack of, 105; and public 

utilities, 143-44 
Santa Anna, 17 

Santa Catarina (state), 102, 103, 420; cli- 
mate in, 98; early settlement, 3-4 
Santa Cruz Abreu, Antenor de, 368 
Santa Genoveva Clinic, 122 
Santarem, 101 
Santo Amaro, 17 

Santo Angelo: military bases at, 368 
Santo Domingo, 354 
Santos: as deep-water port, 206; and rail- 
road transportation, 205; sanitation 



in, 418; settlement of, 5 
Santos, Silvio, 207 
Santos-Sao Paulo Railroad, 46-47 
Sao Gabriel da Cachoeira: military bases 

at, 368 

Sao Jose dos Campos: nuclear facilities 
in, 449; research and development in, 
423 

Sao Luis: tourism in, 208 

Sao Paulo (state and capital), 102, 257, 
268, 343; Cingapura project in, lxix; 
climate in, 98; deputies in represent- 
ing, 269; as financial center, lvii; 
growth of, liv; immigrants in, 186-87; 
as integrated industrial zone, 5; judi- 
cial system in, 275; local government 
in, 287; Metro system in, liv; migration 
to, 114, 259; municipal police in, 401; 
1924 uprising in, 342; nuclear 
research reactors in, 446; overland 
trails from, 26; political parties in, 281, 
289; poor in, 187; population in, 110, 
159, 186; Regional Federal Court (Tri- 
bunal Regional Federal — TRF) in, 
275; research and development in, 
418, 422; rise of, 5; science and tech- 
nology in, 434; settlement of, 5; size 
of, 89; soils in, 96; state banks in, 278; 
subways in, 205; wages in, 119 

Sao Paulo Civil War (1932), 149 

Sao Paulo Power, Inc. (Eletricidade de 
Sao Paulo S.A. — Eletropaulo) , Ixxx 

Sao Paulo-Rio Grande do Sul Railroad, 
63 

Sao Paulo Science and Technology Sys- 
tem, 434-35 

Sao Paulo State Bank (Banco do Estado 
de Sao Paulo — Banespa), 435; sale of, 
lxxxi 

Sao Paulo State Federation of Industries 
(Federacao das Industrias do Estado 
de Sao Paulo— FIESP) , 309 

Sao Paulo State Federation to Support 
Research (Fundacao de Amparo a Pes- 
quisa do Estado de Sao Paulo — 
FAPESP), 422, 434; as source of 
research grants, 436 

Sao Paulo State University (Universidade 
Estadual Paulista — Unesp), 422 

Sao Paulo Stock Exchange (Bolsa de 
Valores do Sao Paulo — Bovespa) , lvii 

Sao Tome, 17 



648 



Index 



Sao Tome e Principe, 320 

Sao Vicente: early settlement, 3^1; estab- 
lishment of, 15-16; settlement of, 10 

Sarah Kubitschek Rehabilitation Center 
(Brasilia), 141 

Sardenberg, Ronaldo Mota, xcii, 362 

Sardinha, Dom Pero Fernandes, 19 

Sarney, Jose, 83-84, 256, 265, 283, 426; 
and civil-military relations, 350; and 
creation of Ministry of Science and 
Technology, 430; economic policies 
under, 224-25, 272; executive branch 
under, 263; foreign relations under, 
320, 329; inflation rates under, 238- 
39; and media relations, 311; nuclear 
policy under, 449; politics of, 286; 
presidency of, 272, 291-93; reorgani- 
zation of executive branch under, 264; 
state and local governments under, 
278; term of office, 260-61 

Sarney, Roseana, 299 

sarsaparilla, 100 

Satellite Launch Vehicle (Veiculo Lanca- 

dor de Satelite — VLS) program, xcii, 

329, 457, 458, 459 
Saudi Arabia: foreign relations with, 318 
savanna soils, 96 
Sawyer, Donald, 7 
schistosomiasis (bilharzia), 138 
School for Sergeants of the Services 

(Escola de Sargentos das Armas — 

EsSA),389, 391 
Schwartz, Stuart, 23 

science and technology, 415-62; admin- 
istration of, 430-35; assumptions in, 
416; computer industry policy, 427- 
28; development of, 416; historical 
evolution of, 417-27; for industrial 
competitiveness in, 428-30; missile 
program in, 458-60; as moderniza- 
tion, 420, 422; nuclear programs in, 
445-52; policies in, 416-17; policy per- 
spectives, 441-44; as pressure group, 
426-27; research and development in, 
435-44; space program in, 452-58 
Science and Technology, Department of 
(Departamento de Ciencia e Tecnolo- 
gia— DCET),435 
Sebastianism, 63 
secondary schools, 146-47 
second empire (1840-89), 44-54 
Second Hague Peace Conference, 61 



Second Institutional Act (1965) , 79 
Secretariat for Computer and Automa- 
tion Policy (Secretaria de Politica de 
Informatica e Automacao) , 430 
Secretariat for Public Security (Secre- 
taria de Seguranca Publica — SSP) , lxii, 
401-3 

Secretariat for Science, Technology, and 
Economic Development (Secretaria 
de Ciencia, Tecnologia e Desenvolvi- 
mento Economico — SCTDE), 434, 
439, 446 

Secretariat of Planning and Coordina- 
tion of the Presidency of the Republic 
(Secretaria de Planejamento e 
Coordenacao da Presidencia da 
Republica— Seplan), 424 

security forces: Federal police in, 400-1; 
State Police in, 401-3 

sedimentary basins, 94 

self-employed businessmen and work- 
ers, 117 

self-sufficiency: policies of, 416-17 
Senate: legislative initiative in, 269; size 

of, 265 
senators: age of, 268 
senior citizens, 110 
Senna, Ayrton, liv 
Sergipe (state), 101, 102 
Sergipe, Ilhade, 21 
Serra da Canastra, 93 
Serra da Mantiqueira, 93 
Serra de Tumucumaque, 92 
Serra do Divisor, 92 
Serra do Espinhaco Range, 91 , 93 
Serra do Mar Range, 91, 93 
Serra dos Aimores, 93 
Serra dos Parecis, 92 
Serra Geral, 93 
Serra Imeri, 92 
sertdo, 98, 101 

services sector, 201-2; growth of, 183 
Seven Years' War (1756-63), 28 
Severance Pay Fund (Fundo de Garantia 

do Tempo de Servico— FGTS) , 144 
sexual abuse and harassment, 120 
shantytowns, 89, 144 
"shooting schools," 385 
Shott, Thomas S., 435 
Silva.Jose Bonifacio de Andrada e, 31, 

37, 38, 41 

Silva, Luis Alves de Lima e, 44, 48, 338- 



649 



Brazil: A Country Study 



39 

Silva, Luis Inacio "Lula" da, lxxv, lxxvi, 

83, 257, 285 
Silveira, Antonio Azeredo da , 326-27 
Simao de Vasconcellos, 10 
Simon sen, Roberto, 67 
Single Health System (Sistema Unico de 

Saude— SUS), 140 
Single Judicial Regime (Regime 

Juridico Unico— RJU) , 264 
Sino-Brazilian agreement, 454 
size, 90-91 

slash-and-burn techniques, xciv-xcv, 104 
slavery: ending of, 53; geography of, 52- 

53; growth of, 42; shift in attitudes 

toward, 52-53 
slave trade, 161; ending of, 40-41, 45-46 
slavocrat agenda, 42 

smallpox, 66; impact on Indian popula- 
tion, 20 

smuggled goods: trade in, 29 

soccer, liii-liv, 89, 130 

Social Christian Party (Partido Social 
Cristao— PSC) , 305 

social conflict and participation: con- 
flict and nonviolence, 149; growth of 
social and environmental movements, 
151-52; inclusion and exclusion, 152- 
54; and nonviolence, 149-51 

Social Democratic Party (Partido Social 
Democratico— PSD), 279, 291 

Social Emergency Fund (Fundo Social 
de Emergencia — FSE), lxxv 

Social-Environmental Institute (Insti- 
tute Socio-Ambiental — ISA), 107 

Socialist Democracy (Democracia Socia- 
lista), 285 

Socialist Force (Forca Socialista), 285 

social movements: growth of, 151-52 

Social Movements for the Environment 
and Development, 107 

social policies, 153 

social security, 143; deficit of, lxxxii; sys- 
tem of, 122 

social structure: Amerindian, 124-26; 
classes, 115-17; elderly, 122; gender, 
118-21; race and ethnicity, 122-24; 
rural groups, 126; youth, 121-22 

social system, 50 

Social Workers' Party (Partido Social Tra- 

balhista— PST), 287 
society and government: military role in, 



337-52 

socioeconomic trends: contradiction 

between negative and positive, 153 
socio-environmentalism, 152 
soils, 95-97 

Solano Lopez, Francisco, 47-48 

Sondal, 363-64, 452 

Sondall, 364, 452 

Sonda III, 364, 452 

Sonda IV, 364, 452, 458, 459 

Sorbonnists, 346 

Soriano, Alzira, 298 

Sorocaba: settlement of, 5 

SOS Atlantic Forest (SOS Mata Atlan- 
tica), 107, 309 

Sousa, Irineu Evangelista de, 47 

Sousa, Martim Afonso de, 15-16 

Sousa, Tome de, 17-18 

Sousa, Washington Luis Pereira de: mili- 
tary capture of, 344 

South, 102-3; climate in, 98-99; colleges 
and universities in, 148; education in, 
147; literacy in, 146; medical access in, 
142; mortality in, 111; population in, 
109 

South American Free Trade Association 
(Area de Livre Comercio Sul-Ameri- 
cana — ALCSA) , lxxxvii 

Southeast, 1 02; colleges and universities 
in, 148; education in, 147; literacy in, 
146; medical access in, 142; mortality 
in, 111; population in, 109 

South Korea: relations with, 322 

South West African People's Organiza- 
tion (SWAPO), 320 

Souza, Herbert "Betinho" de, 154 

soybeans, lxiv, 190, 240 

Space Activities Center (Institute de Ati- 
vidades Espaciais — IAE), 454 

space program, xcii, 452-58 

Spanish: exploration and settlement by, 
12-13, 15; missions of, 11, 12 

Spanish Habsburgs, 22 

Special Border Platoons (Pelotoes Espe- 
ciais de Fronteira — PEFs) , 369 

Special Frontier Battalions, 368 

Special Investigating Commission 
(Comissao Especial de Investigacao — 
CEI),296 

Specialized Engineers, Inc. (Engen- 
heiros Especializados S.A. — Engesa), 
352, 363, 364, 366 



650 



Index 



Special Operations Battalion (Batalhao 
de Operacoes Especiais — Bope), 373 

Special Secretariat for Drugs (Secretaria 
Especial de Entorpecentes — SEE), 
373 

Special Secretariat for Informatics (Sec- 
retaria Especial de Informatica — SEI), 
427 

Special Secretariat for National Drug- 
Control Policy (Secretaria Especial da 
Politica Nacional do Controle de Dro- 
gas— SEPNCD), xciv 

spiritualism, box 

SS-30 rockets, 459 

SS-150 rockets, 459 

stabilization plans, 177-78 

stabilization program: stages of, 179-80 

stagnation, 171-72 

Stalinists, 285 

State Accounts Court (Tribunal de Con- 

tas dos Estados— TCE) , 272-73 
state and local governments, 277-79 
State Assembly (Assembleia do Estado) , 
277 

State Foundation for Scientific and 
Technological Development (Fundo 
Estadual de Desenvolvimento Cienti- 
fico e Tecnologico — Funcet), 434-35 

State Highway Police (Policia Rodoviaria 
Estadual) , 403 

State Militia (Policia Militar do Estado) , 
401 

state-owned corporations: privatization 

of, 212-13; research in, 437-38 
State Police, 401-3 

State Supreme Court (Tribunal de 

Justica— TJ), 277 
state tax revenues, 278 
steel: production of, 160 
Stepan, Alfred C, 344-45, 349, 350, 358, 

409 

Stockholm Conference on the Environ- 
ment (1972), 105 

Stockholm International Peace Research 
Institute (SIPRI), 366 

Strategic Affairs Secretariat (Secretaria 
de Assuntos Estrategicos — SAE), 329, 
351,360, 362,446 

street children, 121; massacres of, 90 

structure of government, 263; executive 
branch, 263-65; judiciary, 273-77; leg- 
islature, 265, 268-73; state and local, 



277-79 

Subsecretariat for Congressional Rela- 
tions, 308 

subsistence-level living standards: of 

black population, lxx 
substitution, 198 
subways, 205 

Suez Canal: Brazilian participation in, 
353-54 

suffrage movement, 298 

sugar, 187, 216, 240; exports of, 46 

sugarcane, 190; displacement of farming 
by gold mining, 23-24, 26-32 

sugar industry, 161; boom in, 161-62 

Sugarloaf (Pao de Acucar), 89 

sugar plantations, 101 

summary court, 406 

Summer Plan, 238; objective of, 178 

Superior Court of Justice (Superior Tri- 
bunal de Justica— STJ), 273, 274 

Superior Electoral Court (Tribunal 
Superior Eleitoral— TSE) , 299, 301, 
312; creation of, 275; decisions made 
by, 276; members on, 275 

Superior Labor Court (Tribunal Supe- 
rior do Trabalho— TST), 276 

Superior Military Court (Superior Tribu- 
nal Militar— STM), 387; creation of, 
275;jurisdiction over, 275 

Supreme Military Council (Conselho 
Militar Superior) , 33 

surgical sterilization, 113 

Suriname, 91; Brazilian border with, 
367-68 

sustainable development: principles of, 
97 

swine herd: growth of, 191 
syncretism, 134 

Tabatinga: fortifications at, 13; military 
bases at, 368 

tangerines, 190 

Tariff Law of 1957, 170 

tariffs, 214; reductions, 245-46 

Tavares, Aurelio de Lyra, 359 

Tavares, Ricardo, lix 

tax revenues: trends in, 225-26 

Technical Coordinating Office for Tar- 
iffs (Coordenadoria Tecnica de Tari- 
fas— CTT), 239 

Technical Coordinating Office for Trade 



651 



Brazil: A Country Study 



(Coordenadoria Tecnica de Intercam- 
bio Comercial— CTIC), 239 

Technology Center (Centro de Tecnolo- 
gia) of the Pontifical Catholic Univer- 
sity of Rio de Janeiro, 424 

technological nationalism: policies of, 
416-17 

technological research: in private sector, 
438-39 

technology, Se* science and technology 
Technology Center (Centro de Tecnolo- 

gia) of the Rio Doce Valley Company, 

437 

Tefe: military bases at, 368 

telecommunications, 131, 207-8; 
state-held monopolies on, 298; sys- 
tems, 438 

telephone business: foreign investment 
in, lxxx 

telephone system, 131 

television: influence on voters, 312; pro- 
duction of sets, 160; soap operas on, 
258 

television stations, 131-32 
tenentismo (movement) , 68 
terra roxa, 96 

territorial aggrandizement, 9-10 
terrorism: direct military involvement in, 

82-83 
tetanus, 137 
textile industry, 171 
Third Pan-American Conference, 61 
Thomson CSF, 330, 370 
Tiete-Parana river network, Ixiii, 206 
timber extraction: in rain forests, 96-97 
Time-Life Group, 312 
time zones, 91 
'Tiros de Guerra," 385 
Tlatelolco, Treaty of. See Treaty for the 

Prohibition of Nuclear Weapons in 

Latin America 
tobacco, lxiv, 190 

Tocantins (state), 99, 101; creation of, 
261, 304; drafting of constitution, 262 

Tocantins-Araguaia Basin, 94 

Tordesillas, Treaty of, 8, 9 

Tordesillas Line, 10, 13; obsolescence of, 
13-14 

Touraine, Alain, lxxvii 

tourism, 208-9 

trade: contraband, 10; exchange rates, 
214-17; effect of industrialization on, 



174; expansion of international, 36- 
37; government intervention in, 233- 
40; partners in, Ivi, lviii; patterns and 
regional economic integration, 240- 
48; policies, 233-40 
Traffic Police (Polfcia de Trafego), 403 
Training Center for Reserve Officers 
(Centro de Preparacao de Oficiais da 
Reserva— CPOR) , 398 
Trans-Amazonian Highway, 81, 90, 114, 
202 

Trans-Brasiliana Project, 202 

transportation, 202, 205-8; air travel, 5- 
6, 103, 205-6, 209; inland waterways, 
206; merchant marine, 206-7; ports, 
206; railroads, 202, 205; roads, 6, 189, 
195, 202; subways, 205; telecommuni- 
cations, 207-8 

transport equipment sector, 171 

Treaty for the Prohibition of Nuclear 
Weapons in Latin America (1967) 
(Treaty of Tlatelolco): ratification of, 
xci-xcii, 450, 451 

Trindade, 91 

tropical beaches, 94 

tropical forests, 99; wealth of, 96-97 

tropical North: climate in, 97-98 

Truman, Harry S., 71 

tubal ligation, 113 

tuberculosis, 137, 139; and mortality, 111 
Tucuruf Dam, 196; hydroelectric poten- 
tial of, 95 
Tumucumaque Range, 91 
Tunui: military bases at, 368 
Tupinamba, 17 
Tupi Network, 207, 311-12 
Tupf speakers, 7-8, 130 
turtle butter, 1 00 
TV-Gaucha S.A., 207 
TV Globo Network, lv, 311-12 

umbanda, Ixx, 1 34 

unemployment, 257; average rate of, 
181-82 

United Nations (UN): Brazilian partici- 
pation in peacekeeping operations of, 
314-15, 336, 354; sponsored Rio Earth 
Summit, 209 

United Nations Children's Fund 
(UNICEF),lxii, 122 

United Nations Conference on the Envi- 



652 



Index 



ronment and Development, 1 04 

United Nations Conference on Trade 
and Development (UNCTAD), 322 

United Nations Development Pro- 
gramme (UNDP), 136 

United Nations Security Council Resolu- 
tion 661, 354 

United Provinces of the Rio de la Plata: 
Brazil's war with, 338 

United States: Brazilian relations with, 
76, 80, 323-31; sharing nuclear tech- 
nology with Brazil, 446-47; security 
relations with Brazil, 356 

United States Agency for International 
Development (USAID), 314 

United States-Brazil Agreement for 
Cooperation on Peaceful Uses of 
Nuclear Energy, xcii 

United States-Brazil Military Assistance 
Agreement (1952), 328, 357 

United States-Canada Free Trade Agree- 
ment (FTA), 244 

United States Drug Enforcement Admin- 
istration (DEA), lxxxviii-lxxxix, 330 

United States-Guyana military exercises, 
368 

United States Nuclear Regulatory Com- 
mission, 327-28 

United States of Brazil (Estados Unidos 
do Brasil) , 54 

Unity and Struggle (Unidade e Luta), 
285 

Universal Church of the Kingdom of 
God (Igreja Universal do Reino de 
Deus) , lxix-lxx 

University of Brasilia (Universidade de 
Brasilia— UnB), 148, 313 

University of Brazil (Universidade do 
Brasil), 419, 420 

University of Sao Paulo (Universidade 
de Sao Paulo— USP), lxx, 148, 419, 
420; Center for the Study of Violence 
(Nucleo de Estudos Sobre a Violen- 
cia), 403; creation of, 419; nuclear 
research at, 445; schools in, 479 

university research: and graduate educa- 
tion, 436-37 

unskilled labor: wage levels for, 183 

uranium reserves, 201 

urban population, 114-15 

urban poverty, 116 

Uruguay, 91, 94; founding of, 47; inde- 



pendence of, 41-42, 47-48; and 
Treaty of Asuncion, 245; war over, 338 

Vaccine Institute (Instituto Vacino- 

genico), 418 
Vale Sao Francisco, 24 
Valle, Alvaro, 287 
Vinia, Lucia, 299 

Vargas, Getulio Dorneles, lxxvii, 67-72, 
150, 343, 423; and creation of labor 
courts, 276; and creation of Superior 
Electoral Court, 275; as dictator, 256; 
economic policy under, 168; election 
of, 276; foreign relations under, 324; 
industry under, 168-71; and media 
relations, 311; and military rule, 344; 
1945 coup against, 345-46; and 
nuclear policy under, 445; ouster and 
suicide of, 265, 324; presidency of, 
255-56; as presidential candidate, 71- 
72 

Vargas, Ivette, 280, 284, 299 
Vasconcelos, Bernardo Pereira de, 42 
Vatican Council I: and Roman Catholic 

Church, 50 
vegetation, 95-97 
Veja, lv 

Venezuela, 91; Brazilian border with, 
367-68; foreign relations with, 316, 
317 

Venturini, Danilo, 449 
Vera Cruz, 14 

Vergueiro, Nicolau de Campos, 42 
Versailles peace conference, 352 
vertical integration, 23, 171 
vice mayors, 278-79 
Vietnam: relations with, 323 
Vigario Geral, 403 
vigilantism, 403 

Villegaignon, Nicolas Durand de, 21 

Vitoria: as deep-water port, 206 

Volta Redonda, 69, 363; research and 

development in, 420; steel plant, 374 
voters: registration of, 259 
voting, 300-1 

wage gap: between men and women, 
119-20 

wage labor: substitution of, for slave 
labor, 163 



653 



Brazil: A Country Study 



Walters, Vernon, 328 

Wandenkolk, Eduardo, 340 

War College (Escola Superior de 
Guerra— ESG), 71, 345, 393-94; inter- 
locking of, 348; internal security mea- 
sures, 346, 348 

War Materiel Industry (Industria de 
Material Belico do Brasil — Imbel), 363 

War of the Farrapos (1845), 44, 149 

War of the Outsiders (Guerra dos Embo- 
abas) , 24 

War of the Triple Alliance (1864-70), 

lxxxvi, 13, 66, 149,339 
water supply, 143 

Weather Forecasting and Climate Stud- 
ies Center (Centro de Previsao do 
Tempo e Estudos Climaticos — 
CPTEC), 452-53 

Wesson, Robert, 359 

West Germany: acceptance of nuclear 

technology from, 448, 449 
Westinghouse Electric Corporation, 

200, 327, 447 
wheat, 190 
white rivers, 94 

Wiederspahn, Henrique Oscar, 338 
Wilheim, Jorge, 129 

women: acquired immune deficiency 
syndrome (AIDS) in, 138; in armed 
forces, 399-400; education of, 118, 
119; and family, 132; groups, 151; 
growth of movement of, 120-21; his- 
torical predominance of, over men in 
Brazilian population, 110; in labor 
force, 118-20, 181; in labor move- 
ment, 66-67; life expectancy for, 111; 
in politics, lxxi, 298-300 

Woods Hole Research Center, xc 

The Work (O Trabalho) , 286 

Workers' Party (Partido dos Trabal- 
hadores— PT), lxxv, 257, 269, 280, 
281, 285-86, 288, 289, 302, 303, 305, 
307, 337 



Workers' Party in the Struggle (Na Luta 
PT),285 

World Bank, xcv, 108, 436; Brazil's partic- 
ipation in, 315; 1985 loan for, 428 

World Cup: soccer, 81 

World Trade Organization (WTO): Bra- 
zil's participation in, 315 

World War I, 65, 356, 363; Brazil's 
involvement in, 352 

World War II, lxxxvi, 70, 356, 360, 363; 
Brazil's involvement in, 352-53; eco- 
nomic achievements in, 167-68; socio- 
economic transformation after, 159 

World Wildlife Fund (WWF), lxiv, xcv, 
108 

Wrobel, Paulo S., 375 

Xavier, Joaquim Jose da Silva: execution 

of, 31-32 
xenophobia, 46 

Xingu Indigenous Park: Amerindian 
population in, 125 



Yanomami Indians, xciv, 125; massacres 

of, 90, 372 
Yanomami Indigenous Park, 125, 372 
yellow fever, 66, 138 
Young Catholic Workers, 67 
Young Turks, 277, 341-42 
youth, 121-22 

Youth Party (Partido dajuventude — PJ), 

303 

Yugoslavia: United Nations peacekeep- 
ing operations in, 354 

zona da mata, 101 
Zumbi, lxxiii 



654 



Contributors 



Werner Baer is Professor of Economics at the University of Illi- 
nois at Urbana-Champaign. 

Donald V. Coes is Associate Director of the Latin American 
Institute and Professor of International Management at 
the University of New Mexico in Albuquerque. 

David V. Fleischer is Professor of Political Science at the Uni- 
versity of Brasilia (Universidade de Brasilia) in the Federal 
District . 

Rex A. Hudson is Senior Research Specialist in Latin American 
Affairs with the Federal Research Division of the Library 
of Congress. 

Maria Helena Magalhaes Castro is a researcher with the Brazil- 
ian Institute of Geography and Statistics (Fundacao Insti- 
tuto Brasileiro de Geografia e Estatistica — IBGE) in Rio 
de Janeiro and Assistant Professor at the Institute of Phi- 
losophy and Social Sciences (Instituto de Filosofia e Cien- 
cias Sociais) of the Federal University of Rio de Janeiro 
(Universidade Federal do Rio de Janeiro — UFRJ). 

Frank D. McCann is Professor of History at the University of 
New Hampshire in Durham. 

Charles C. Mueller is Professor of Economics at the University 
of Brasilia. He is also a member of the Institute for the 
Study of Society, Population, and Nature (Instituto 
Sociedade, Populacao e Natureza — ISPN), also in the 
Federal District. 

Donald Sawyer is a sociologist and President of the ISPN. 

Simon Schwartzman is President of the IBGE and Coordinator 
for Technical Cooperation at the IBGE. 

Scott D. Tollefson is Assistant Professor in the Department of 
National Security Affairs of the Naval Postgraduate School 
in Monterey, California. 



655 



Jaklen Muoi Tuyen received an M.A. in Latin American Studies 
from the University of California/Los Angeles (UCLA) in 
1996 and a Master of Public Health from Yale University 
in 1998. She completed a summer internship with the 
Federal Research Division of the Library of Congress 
under the sponsorship of the Hispanic Association of Col- 
leges and Universities (HACU). 



656 



Published Country Studies 



550-65 


Afghanistan 


550-98 


Albania 


550-44 


Algeria 


550-59 


Angola 


550-73 


Argentina 


550-111 


Armenia, Azerbaijan, 




and Georgia 


550-169 


Australia 


550-176 


Austria 


550-175 


Bangladesh 


550-112 


Belarus and Moldova 


550-170 


Belgium 


550-66 


Bolivia 


550-20 


Brazil 


550-168 


Bulgaria 


550-61 


Burma 


550-50 


Cambodia 


550-166 


Cameroon 


550-159 


Chad 


550-77 


Chile 


550-60 


China 


550-26 


("'nlnmhia 


550-33 


Commonwealth Carib 




bean, Islands of the 


550-91 


Congo 


550-90 


Costa Rica 


550-69 


Cote d'lvoire (Ivory 




Coast) 


550-152 


Cuba 


550-22 


Cyprus 


550-158 


Czechoslovakia 



(Area Handbook Series) 



550-36 


Dominican Republic 




and Haiti 


550-52 


Ecuador 


550-43 


Egypt 


550-150 


El Salvador 


550-113 


Estonia, Latvia, and 




Lithuania 


550-28 


Ethiopia 


550-167 


Finland 


550-173 


Germany 


550-153 


Ghana 


550-87 


Greece 


550-78 


Guatemala 


550-174 


Guinea 


550-82 


Guyana and Belize 


550-151 


Honduras 


550-165 


Hungary 


550-21 


India 


550-154 


Indian Ocean 


550-39 


Indonesia 


550-68 


Iran 


550-31 


Iraq 


550-25 


Israel 


550-182 


Italy 


550-30 


Japan 


550-34 


Jordan 


550-114 


Kazakstan, Kyrgyzstan, 




Tajikistan, Turkmeni- 




stan, and Uzbekistan 


550-56 


Kenya 


550-81 


Korea, North 



657 



550-41 

JJU — tl 


JVVJXCd., oUUUJ 


550-37 

JJU J 1 


rvVV all Ltd oil Li JJ Ui U11U1 


550-58 


Laos 


550-51 


Saudi Arabia 


550-24 


Lebanon 


550-70 


Senegal 


550-38 


Liberia 


550-180 


Sierra Leone 


550-85 


Libya 


550-184 


Singapore 


j ju — i / 


ivldidWl 


550_8fi 
JJU — ou 


kjUllldlld. 


550^5 


Malaysia 


550-93 


South Africa 


550-161 


Mauritania 


550-95 


Soviet Union 


550-79 


Mexico 


550-179 


Spain 


550-76 


Mongolia 


550-96 


Sri Lanka 


550^10 

JJU — ^ty 


IVIUIUCCU 


550—97 

J JU— jL I 


O UUdll 


550-64 


Mozambique 


550-47 


Syria 


550-35 


Nepal and Bhutan 


550-62 


Tanzania 


550-88 


Nicaragua 


550-53 


Thailand 


550-157 


Nigeria 


550-89 


Tunisia 


550-04 


WCCcUlld. 


550-80 

JJU — ou 


1 III ivC J 


550-48 


Pakistan 


550-74 


Uganda 


550-46 


Panama 


550-97 


Uruguay 


550-156 


Paraguay 


550-71 


Venezuela 


550-185 


Persian Gulf States 


550-32 


Vietnam 


550-12 


Peru 


550-183 


Yemens, The 


550-72 


Philippines 


550-99 


Yugoslavia 


550-162 


Poland 


550-67 


Zaire 


550-181 


Portugal 


550-75 


Zambia 


550-160 


Romania 


550-171 


Zimbabwe 


550-115 


Russia 







658 



PIN: 004187-000 



